The 2022 edition of PRD’s Australian Economic and Property Report revealed a slower pace of median house price growth nationwide in the 12 months to June 2022, compared to the same period from 2020 to 2021.
PRD Chief Economist Dr Diaswati Mardiasmo said the property market as we know it has changed dramatically over the course of the past 12 months.
“Doom and gloom were predicted throughout COVID-19, yet the market flourished. Now in 2022, we have markets within markets, moving in different directions and speeds,” Dr Mardiasmo said.
In the 12 months to the first half of 2022, the report noted capital city markets nationwide have recorded an average median house price growth of 6.3%.
This figure is beaten out by the mammoth 15.5% average median house price increase across the same period to the first half of 2021.
That said, Dr Mardiasmo noted capital cities are now behaving differently.
“Sydney and Melbourne saw a turn in their markets, with a decline in median house price growth,” she said.
“Brisbane, Perth, Hobart and Darwin did not.
“There is more uniformity in regional markets, with all maintaining a double digit speed of growth.”
Source: PRD Australian Economic and Property Report 2022
In the three months to the June quarter 2022, PRD's 'Time to Buy a Dwelling' Index revealed QLD and TAS residents were the most reluctant to purchase a property, reducing -26.8% and -38.8% respectively.
On the other side of the coin, VIC and SA residents showed an eagerness to capitalise on falling prices with the index increasing by 5.6% and 16.3% respectively.
Annually in the 12 months to the June 2022 quarter, the 'Time to Buy a Dwelling' index decreased for all states.
Source: PRD Australian Economic and Property Report 2022
With markets within markets now operating with minds of their own, Dr Mardiasmo said the question of demand and supply imbalance is prominent, proving to be the crux of price movement.
“In the past 12 months (to July 2022), we have seen this imbalance deepen, with demand outweighing supply, both in sales and rental markets,” she said.
“How deep this imbalance is will determine price growth in an area.
“Many more events and disruptions will colour the rest of 2022 and 2023, creating a never-ending seesaw of demand and supply balance in the Australian property market.”
Market drivers to ‘cushion the blow’ of property market downturn
Despite Sydney and Melbourne markets coming off the boil thanks to increasing home loan rates and cost of living pressures, PRD is confident market drivers will stand firm to prevent a severe or lengthy housing market downturn.
PRD Managing Director Todd Hadley said a number of market drivers should cushion the blow in the short-term despite additional increases in interest rates, higher inflation, and the tapering of house prices.
“Employment figures are exceptionally strong, wage growth is beginning in sectors to compensate for higher living costs, increasing rental prices will make it more attractive for tenants to buy a home and there will be a sharp increase in international tourism," Mr Hadley said.
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