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Latest Australian Property Markets News and Forecasts

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If 2023 taught property investors anything, it was to be careful who you listen to.

The media was full of mixed messages about what’s ahead for our economy and the property markets and most of the news was negative, yet we’ve ended up the year with property values regaining virtually all their losses of 2022.

As we finish the year there are lots of clues in the financial news about what the next year could bring, including an updated migration strategy that will see the number of new immigrants plummet.

We discuss this in today’s Property Insider video as well as the latest RBA rate decision, the latest home building approvals, building cost and housing finance numbers as well the GDP figures that tell us how our economy is travelling.

RBA gives itself time to assess

Watch this week’s Property Insider chat as Dr Andrew Wilson comments on the RBA’s decision to keep rates on hold at its December meeting.

You may recall that Dr Wilson predicted the RBA’s November forecasts based on ‘one to two’ more increases in the cash rate, with one having already been delivered.

By pausing this month, the RBA Board has given itself ‘time to assess’ the impact of recent rate increases.

The October CPI indicator was lower than market forecasts and, probably lower than the RBA’s expectations.

The RBA’s statement after their meeting noted that both household consumption and dwelling investment are weak and that conditions in the labour market are continuing to ease gradually.

Among the changes to the statement from last month was an acknowledgement that there are ‘encouraging signs of goods inflation abroad’.

Recent downside surprises for inflation in some major advanced economies would likely also have been some comfort to the Board, given the global nature of the inflation pressures coming from goods and energy prices.

In the lead-up to its next meeting in February, the RBA Board will be assessing whether inflation is declining fast enough to reach the 2–3% target in 2025.

They seem to have no tolerance for further delays in the return of inflation to the target beyond this date.

Rba Monthly Cash Rate December

Migration levels are set to fall significantly

Watch this week’s Property Insider video as Dr Andrew Wilson and I discuss the federal government’s new immigration strategy which comes at a time when many people are voicing concern about the record rate of arrivals in Australia, which Treasury estimates hit 510,000 in 2022-23.

However, the mid-year economic and fiscal outlook forecasts that net overseas migration will fall to 375,000 people in 2023-24 and 250,000 in 2024-25.

Australia faces a number of significant challenges: the need for productivity growth, a fast-ageing population, the urgent need for an energy transition and to build sovereign capabilities, and the theory is we need strong migration and to import the best and brightest talent to come and help us solve these issues.

However, our housing markets and infrastructure just can’t cope with the rapid influx of migrants at present.

Population Increase Vs Building Completions

One of the main features of the new strategy will be a three-tiered temporary skilled migration program, while it will also see a continuation of the federal government’s efforts to tighten access to international student visas.

Migrants under the pathway are expected to bring substantial economic benefits.

Treasury has forecast that this policy innovation will add $3.4 billion to the budget over the next decade (that’s just in additional tax revenues) and have huge broader influences on the Australian economy.

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