The property market ended financial year 2023 with a decline in sale settlements but the second half of the year seem to point to positive signs of recovery.
According to PEXA Research, more than 665,000 property settlements were recorded across Australia in the year, which was 18.6% lower than FY 2022, which was considered a boom year given the settlement volume of around 754,000.
Still, FY 2023’s overall sale settlement volume remained 11% higher than in pre-pandemic FY 2020.
While some states reported declines in settlement volume over the first half of FY 2023, numbers started to recover over the second half, allowing for a strong finish.
PEXA head of research Mike Gill said the bounce-back over the last few months of the year serve as a good reason to be optimistic for the property market in the year ahead.
“Despite a soft start to the year, residential sale settlement volumes picked up from March across all mainland states, with June settlement volumes finishing the year strongly — at comparable settlement numbers to the prior boom year,” he said.
Starting from March 2023, settlement numbers have been recovering steadily, and the financial year concluded on a strong note with over 66,000 property settlements recorded in June.
This significant increase from 58,000 in May and 48,000 in April signals a noteworthy rebound in settlement volumes.
“This suggests the market has already bottomed out and is beginning to recover as we enter FY 2024.”
Mr Gill said there remains strong demand for housing despite higher interest rates.
“There are a number of factors that will continue driving the property market this year, including increased net migration, the trend toward smaller households, low volumes of new listings as sellers wait for the market to improve, and a very tight rental market,” he said.
The biggest states, New South Wales, Queensland, and Victoria, all reported double-digit declines in residential property settlements in FY 2023 compared to FY 2022.
Queensland is the biggest state for sale settlement, maintaining its standing in the previous financial year. Over the period, it reported 176,000 residential sale settlements.
In terms of value, over $181.4bn was spent on residential property in New South Wales during the year, 23.9% lower from the previous period.
The total sale settlements also included commercial property — Victoria had the highest number of settlements in this segment during the year.
Overall, $603bn was spent on property in Australia in FY 2023, greater than the amount spent in FY 2021 and FY 2020, indicating the increase in average selling prices over that period.
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