Herron Todd White
Herron Todd White

A message from our CEO

Published 23 May 2023
Author: Gary Brinkworth

Welcome to the May edition of Month in Review

Following a brief pause by the RBA there’s a sense that property markets around Australia may be starting to rebound with the rate of price declines slowing and recent positive auction clearance results in both Sydney and Melbourne.


While analysis shows annual price growth has been negative in our biggest capital cities, the rate of price declines has now eased. Moreover, many markets are reporting positive monthly gains in prices which suggests we’re at the end of the price correction.


These more positive results to the end of April were predominately a function of the pause in interest rates. Most economic commentary leading up to the Reserve Bank’s May announcement suggested that with inflation attenuating, we are near the peak cash rate. Buyers who’d been cautious about pulling the trigger on a purchase look to have become more competitive. This was highlighted in a recent AFR report confirming two consecutive weeks where the national auction clearance rate was above 70 per cent.


Of course, this data doesn’t reflect the impact of the RBA’s somewhat unexpected 25 basis point rate increase this month. We may see some of the positive momentum slow as a result, however, most numbers still imply we have hit the bottom of the price cycle. It’s coming through in the qualitative data as well. Our valuers across most markets have said their agent contacts are reporting increased enquiry along with more buyer participation at open homes and auctions.


If we are starting the recovery now, then the 2022 “correction” was extremely mild. The peak-to-trough fall in Australian property values has been around 10 per cent so far, which isn’t significant compared to the close to 25 per cent increase in values throughout the 2021 boom run.


This combination of factors bodes well for future price growth – even if it is moderate. Rising immigration coupled with low housing supply and challenges around construction all work to increase values. The recovery may be gradual and extended in some locations, but it appears underway.


As mentioned, this opens a window of opportunity for most buyers. Acquiring property now – be it a home or investment – with a view to holding for the long term could be a savvy decision, subject to the nuances of the location and property itself. This is particularly so for buyers of lower-priced real estate in desirable locations. An understanding of what compromises you should and shouldn’t make in this sector will mitigate the risks and bolster the upside. For those purchasers in particular, this issue of Month In Review is essential reading. Our residential teams around the nation discuss strategies for purchasing affordably in blue-chip suburbs.


For commercial readers, our industrial valuers discuss new construction and refurbishment in the industrial sector, while our rural specialists analyse market conditions and supply chain influences on their property sectors.


Please enjoy this month’s edition of Month In Review.


Gary Brinkworth