Divergent Real Estate Trends Challenge the Notion of a Unified Australian Property Market

The Australian property landscape is undergoing a significant transformation, defying the traditional concept of a unified national market. According to Sue Williams’ recent examination in her article “There is no such thing as a ‘national property market’ in Australia anymore,” the discrepancies in property prices across major cities underscore the emergence of distinct regional markets.

Williams highlights that while prices in Perth, Adelaide, and South-East Queensland are experiencing robust growth, markets in Melbourne and Sydney are cooling down, with Canberra and Hobart showing minimal rises or declines. “Australia’s major city property markets are seeing a growing divergence in performance,” Westpac senior economist Matthew Hassan commented, emphasizing the stark contrasts from one city to another.

The shift from a synchronized national trend to a more fragmented market can be attributed to several factors. Urban and regional planning expert Professor Nicole Gurran from the University of Sydney points out that while overarching factors like interest rates and tax settings affect all markets, other dynamics such as migration patterns play out differently across regions. “It doesn’t make sense to talk about the housing market nationally; it’s a constellation of different submarkets,” Gurran explained.

Local state policies and migration flows are now major determinants of housing market outcomes, as noted by Tim Reardon, chief economist of the Housing Industry Association. “Western Australia is booming, and Sydney is trashing south,” Reardon said, highlighting the influence of state government actions on housing markets, particularly concerning new home building.

Domain’s chief of economics & research, Dr. Nicola Powell, provided further insights into the diverging market conditions. She observed that the synchronization seen during the pandemic is giving way to a “multi-speed market across Australia,” which affects everything from pricing expectations to the urgency of transactions in various cities.

Furthermore, a study by Maria Yanotti, a senior lecturer in economics at the University of Tasmania, illustrated how population changes in one area can cause ripple effects in others, enhancing or diminishing property values. Yanotti’s research shows that “Western Australia and Queensland…have their own characteristics,” distinct from the interdependencies seen in other states.

As the Australian real estate market continues to evolve, both buyers and sellers need to stay informed about the specific dynamics of their regions, recognizing that the days of a singular, national market perspective are increasingly becoming a thing of the past.

References:

https://www.domain.com.au/news/there-is-no-such-thing-as-a-national-property-market-in-australia-anymore-1317807/

Melissa Fisher

Melissa Fisher

Founder,
Acuity Development Group & The Right Team