According to Dr Peng Yew Wong, a senior lecturer at RMIT’s School of Property, Construction and Project Management, the recent price increases recorded across the country tell a clear story that supply shortages have become such a strong market driver that they are outweighing other factors by an extreme proportion.
Though property prices experienced a downturn between April 2022 and February 2023, as interest rates began to rise, a swift recovery has surprised many. According to CoreLogic, as of September 2023, prices have recovered around half of the preceding downturn between April 2022 and February 2023, when national home values fell 9.1 per cent.
As Dr Wong noted: “The housing market behaved quite the opposite way from the market expectations in the midst of high inflation and high mortgage rates.”
“Instead of the much-anticipated downturn caused by high cost of living and high mortgage repayments, house prices continue to perform strongly – consistently registering positive growth since the beginning of 2023. Australian house prices are expected to hit a new record high in the final quarter of 2023,” he said.
As someone who has been tracking market indicators for over a decade, Dr Wong remarked that there are a number of factors that regularly push Australian dwelling prices up and down.
“The market boom during the mid-2010s observed some significant foreign purchases, the market downturn in 2018 was due to the infamous Royal Banking Commission enquiry that caused credit squeeze, followed by another significant boom due to the expansionary fiscal and monetary policies implemented during the COVID-19 pandemic,” he explained.
“Although foreign investment represented a significant housing market driver during the 2010s, it had little impact on house prices growth during the COVID-19 pandemic lockdown period,” he remarked.
Though there are a number of market factors continuing to put pressure