Australia’s property market continues its upward trajectory, with the national median property price increasing for the 19th consecutive month in August. However, the rate of growth is beginning to decelerate, raising questions about the sustainability of this trend.
According to CoreLogic, the national median price rose by 0.5% in August, but the pace of growth has noticeably slowed. CoreLogic attributes this slowdown to affordability constraints, which have become a significant factor in the market.”Affordability constraints are a key factor behind the broader slowdown,” CoreLogic reported, highlighting the challenges faced by buyers in an environment of rising property prices and high living costs.The delicate balance between supply and demand also plays a critical role in the market’s current dynamics. While there remains more demand for housing than available supply, CoreLogic noted that the flow of advertised supply and demand is becoming increasingly balanced.Despite these headwinds, CoreLogic forecasts that the national median price will continue to rise through the remaining months of 2024, though at a more modest pace. This continued growth is underpinned by a longer-term shortage of new housing supply, a problem that has been exacerbated by ongoing constraints in the residential construction sector.Buyer activity has slowed amid high cost-of-living pressures, but CoreLogic suggests that many vendors still hold the upper hand. In most markets, sellers may choose to delay their property sales if buyers do not meet their price expectations, potentially keeping prices elevated.As the market evolves, both buyers and sellers will need to navigate these challenging conditions carefully. While growth is slowing, the underlying fundamentals of supply and demand continue to support a positive outlook for property prices, albeit at a more restrained pace.
