According to reports from the Australian Financial Review, the Australian real estate market is facing a series of challenges and opportunities. According to Oxford Economics Australia forecasts, over the next three years, property prices in major cities such as Sydney and Perth will continue to rise, with the median price in Sydney expected to approach $2 million Australian dollars and Perth surpassing the $1 million Australian dollar mark. Additionally, significant price growth is anticipated in cities such as Melbourne, Brisbane, Canberra, and Adelaide, forming a nationwide trend.
The driving factors behind this forecast mainly include two aspects. Firstly, anticipated interest rate cuts and the resulting decrease in home purchase costs. Although current interest rates are relatively high, an expected reduction in rates will boost buyer confidence and increase demand in the real estate market. Secondly, the shortage of housing supply has become a significant factor driving price increases. Factors such as overseas migration, foreign buyers, and upsizing sellers have increased housing demand, while inadequate supply further exacerbates the imbalance between supply and demand in the market.
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Price increases and trends vary across different regions. The Perth market is considered to lead the overall price increase in Australia, with a cumulative increase of 30% expected over the next three years. This expectation is also driven by strong economic growth and population growth. The Darwin market is also attracting attention, with prices expected to rise by 24%, mainly due to increased government and defense spending. Price growth expectations in cities like Melbourne and Sydney are also expected to exceed previous forecasts.
In addition to the detached house market, the unit housing market is also receiving attention. Over the next three years, unit housing performance is expected to outperform detached houses, even leading in some cities. Significant price growth is also anticipated in unit housing in cities like Sydney, Perth, and Melbourne, echoing the overall trend of rising prices.
Interest rate cuts will be an important means of alleviating affordability pressures caused by rising prices. Anticipated interest rate cuts will reduce the income required to pay mortgages, especially in high-priced areas like Sydney. This measure is expected to boost buyer confidence and further stimulate activity in the real estate market.
