The pace of home price falls has eased in recent months, with the housing market downturn now stalling, according to PropTrack.
National home prices were up 0.18% in February 2023, with home prices edging higher in every capital city except Hobart.
While activity in the housing market has fallen as interest rates have quickly risen, the limited stock available for sale has led to a pickup in competition among potential buyers, insulating home values.
While home prices have fallen from their peak in most markets, home prices nationally were still 29.4% above their pre-pandemic levels.
PropTrack Senior Economist Eleanor Creagh said the housing market correction had lost momentum in recent months, with the pace of price falls easing in most markets.
“After revised national home prices recorded a small (0.09%) uplift in January, prices increased a further 0.18% in February 2023,” Creagh said.
“However, it is too early to call an end to the downturn. While interest rates have been the primary driver of home price falls to date, there are factors beyond interest rates at play. Sellers in market now are benefitting from low competition with other vendors, as buyers vie for available stock. The constrained level of properties available for sale is ‘putting a floor’ under home prices and has concentrated buyer demand.
“The longevity and depth of the current downturn will be influenced by the level of supply, as well as the trajectory of interest rates, in the months ahead. A further 25bp rate rise in March, taking the cash rate to 3.60%, is widely expected, which will weigh on borrowing capacities further. However, if supply remains limited, this will help counter the downward pressure on home prices. “
Creagh said positive demand drivers stemming from the shortages in rental supply and rebound in international migration also remained.
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