Melbourne, Australia: The upper end of the residential property market is defying continued high interest rates, with volumes showing signs of recovery in the first quarter of FY24.
PEXA’s latest Property Insights Report found residential settlement volumes in the $1 million-plus price bands were mostly up across the eastern states compared to the prior quarter. Volumes in the $1.5 million-plus and $2.0 million-plus price bands rose 5.8% and 11.6% respectively in NSW, and 3.6% and 4.5% respectively in Victoria.
At the lower end of the market, sale settlements in the sub $500,000 price band were down between 9-13% in the eastern states driven by lower vacant land settlements. This resulted in overall volumes falling 4.4% compared to the June 2023 quarter and down 5.2% on the September 2022 quarter.
Upper end of property market showing signs of recovery in FY24
PEXA’s Head of Research, Mike Gill, said “The higher end of the market is showing strong signs of recovery driven by lower property stock availability during the winter months and increased confidence as buyers factored in the previous pause in interest rate rises.
“While total volumes were slightly down, the market stabilised during winter, when volumes usually experience a seasonal dip, as vendors hold off on listing properties until spring. Volumes are expected to trend upwards as the market moves into the important spring selling season. This culminates in December which historically sees the highest volumes of any month, as buyers look to take possession of properties before the Christmas holidays.
“While residential sale settlements in the sub $500,000 price range were down in NSW (-12.9%), Victoria (-12.0%) and Queensland (-9.3%), this was attributed to falls in vacant land settlements. Vacant land settlements traditionally see a spike in settlements in the June quarter which often results in a decline in lot settlements in the September quarter. This does not necessarily reference a broader softening in the affordable end of the property market,” he said.
The PEXA report provides a comprehensive view of property sale settlement trends in Australia for the first quarter of the financial year ending June 2024, comparing settlement trends over the past four quarters, focussing on the five mainland states of NSW, QLD, VIC, WA and SA.
Residential property highlights
- All eastern states recorded similar declines in settlement volumes in the Sep-23 quarter compared to the Jun-23 quarter. NSW was the only state to record an increase on the prior year (+1.6%).
- The property market showed signs of stabilising with National sale settlements hovered around the mid-50Ks during the quieter winter months. Volumes are expected to trend upwards as the market moves into the important spring selling season.
- Continuing the recent trend, Queensland topped the nation again with the highest volume of residential sale settlements. Although down -3.0% on Jun-23 quarter, 43,052 sale settlements were recorded in the sunshine state in the recent quarter.
- A total of $48.2B was spent on residential property in NSW in the Sep-23 quarter. Down 0.3% compared to the previous quarter and up 1.0% on the Sep-22 quarter.
Commercial property highlights
- Queensland maintained its lead in the Sep-23 quarter with more commercial settlements than its southern neighbours. 2,702 commercial settlements were recorded in Queensland, ahead of Victoria with 2,527.
- Significant declines in the aggregate value of commercial sale settlements were experienced in the Sep-23 quarter, particularly in NSW down 35.7% year-on-year (to $6.6B), and Victoria down 22.5% (to $6.0B).
- Postcode 4220 (Burleigh Heads) in Queensland posted the most sale settlements of any postcode in the eastern states. 67 commercial property transactions settled in the Sep-23 quarter.
PEXA is a world-leading ASX-listed digital property exchange platform and property insights solutions business. Since 2014, PEXA has facilitated more than 16 million property settlements through the PEXA Exchange in Australia, with 88% market reach, and in 2022 PEXA launched in the UK.
The PEXA Group of companies, including .id (Informed Decisions), Value Australia and Land Insight, delivers digital insights and property solutions that help government, financial institutions, banks and property practitioners to unlock the future value of property.
For more information, please contact:
Danielle Tricarico – Head of Corporate Affairs, PEXA
M: 0403 688 980