Confidence is returning to the property sector, a new report showed, as savvy buyers and investors shed their cautious approach and return to the market.
Since the start of 2023, there has been an observed increase in activity from educated buyers and investors who have come to the realisation that “waiting it out on the sidelines” won’t “improve their portfolios anytime soon”.
These findings were according to the latest Property Investment Professionals of Australia National Market Update, which curated insights and analysis from seven market experts and the group’s members across the country.
PIPA chair Nicola McDougall said property prices appeared to be stabilising, partly due to the low volume of stock for sale.
The executive also cited CoreLogic data, which revealed a more positive trend in housing values alongside a persistently lower-than-normal flow of new listings coming on the market.
In its March report, CoreLogic showed capital listings over the past four weeks were 19.9 per cent below the previous five-year average for the same time of year, indicating the low advertised stock is likely a central factor keeping a floor under housing prices despite clearly declining demand.
“The 10 consecutive rises have added an eye-watering 3.5 percentage points to the cash rate, which has pushed interest rates into the 5 per cent to 6 per cent range — a level many borrowers may never have experienced,” she said.
But, with inflation appearing to have “peaked”, Ms McDougall commented, “There certainly are plenty of signs that we are heading for more positive property conditions in the months ahead.”
The latest data from the Australian Bureau of Statistics (ABS) put the Consumer Price Index (CPI) just 1.4 per cent higher in the March quarter of 2023 and 7.0 per cent higher over the past 12 months, representing a slowing of the recently brisk pace of inflation that spurred the Reserve Bank (RBA) to act with 10 consecutive cash rate rises beginning in May 2022.
With the latest figures showing the rate of inflation on a definite slowdown, Real Estate Institute of Australia (REIA) president Hayden Groves has urged the RBA to consider a further pause on rate rises.
“With the CPI having peaked late last year as was forecast by the RBA, it is time for it to continue to keep a pause on further rate rises at its meeting next week, allowing additional time to consider additional data showing the lagged impact of the previous 10 rate increases and assess the outlook for the economy,” he said.