October 2023 will be remembered as a pivotal month for the Australian real estate market, marked by significant increases in both buyer and seller activity, accompanied by a notable surge in real estate values.
Based on data provided by Raine & Horne, the number of potential buyers attending open for inspections (OFIs) has experienced a remarkable 25% increase when compared to September.
On the supply side, Raine & Horne reports that property listings have grown by nearly 10%, and a 3% rise in appraisals signals a continued flow of properties into the market as we approach the holiday season.
With increased buyer demand still outstripping the supply of new listings, it comes as no surprise that CoreLogic has reported a national uptick in home values, with a 0.9% increase in October. Particularly noteworthy is the strong performance of Perth (1.6%), Brisbane (1.4%), and Adelaide (1.3%).
Three capital cities have witnessed dwelling values surge by more than 10% over the first ten months of the year, with Sydney leading the way at 10.9%, closely followed by Perth at 10.8%, and Brisbane at 10.2%.
Brisbane's housing market showed a notable recovery in October, wiping out the previous -8.9% decline in values to reach a new all-time high. Perth and Adelaide have also reached new record highs following their recoveries from mild downturns earlier this year.
Surging immigration fuelling real estate values
Angus Raine, Executive Chairman, Raine & Horne said, “It's clear that the Australian real estate market is continuing to thrive, with increased listings, appraisals, and growing buyer demand.
“One factor that shouldn’t be overlooked is Australia’s increased immigration and it’s impact on real estate values.”
As per a report by AMP Capital, it appears that net immigration for the year 2022-23 reached approximately 500,000, surpassing the initial forecast of 235,000 forecast in the October 2022 Federal Budget. Furthermore, the monthly influx of arrivals is set to continue for the 2023/24 financial year.
Shortage of new homes
The AMP report also indicated that the government's pledge to construct 240,000 residences annually for five years is promising, yet building commences only in July 2024 and could face challenges, considering that Australia has only managed to complete 187,000 per annum in the past five years.
“The positive trends around buyer and seller activity along with higher immigration and a shortage of new homes will likely keep the real estate market moving forward as we approach the holiday season,” Angus Raine said.
“We predict the spring market will continue into summer and up to late December and then start up again earlier than usual in mid-January, as more vendors and buyers make their moves.”