Australia’s property settlement platform PEXA reports the December quarter recorded the highest number of property transactions of any quarter during 2023.
In its 2023 Property Insights Report released on Tuesday, PEXA said more than 670,000 properties were bought and sold in Australia last year, worth a combined valued of around $613 billion.
That was 9.1% down on the total value of property transactions in 2022, including both the residential and commercial sectors.
The data shows residential settlement volumes grew across all price bands in the second half of 2023 with nearly $50 billion of residential property settled in December alone.
This roughly coincides with CoreLogic data which indicates there were 115,241 dwellings sold in the three months to January 2024, and nearly 500,000 in 2023 - 2.8% lower than 2022.
Higher end of the market leads upturn
The premium end of the residential market led the recovery with a significant growth in settlement volumes for properties worth more than $1 million across the eastern states.
Settlement volumes for homes in the $1.5 -$2 million and $2 million-plus price bands also increased in the second half of 2023, particularly in New South Wales.
At the lower end of the market, sale settlements for properties below $500,000 were also up across the eastern states.
However, the proportion of properties valued below $500,000 dropped significantly, particularly in Queensland.
In Queensland, 36.7% of settled properties were valued below $500,000 in the December quarter, compared to 44% in the same quarter in 2022.
State by state
While New South Wales recorded the highest spend on residential property (31% of the national total), it was Queensland that led on a volume basis for the third year in a row.
Queensland accounted for more than 26% of national residential transactions.
All states posted declines in aggregate values during 2023, with Victoria experiencing the biggest fall of 13.9%.
The Western Australia market maintained its strength, remaining relatively unchanged.
Although 2023 saw a decline in settlements compared to the pandemic-related property boom of 2021 and 2022, PEXA’s head of research Mike Gill said the uptick in transactions at the end of the year suggest the market may have reached a turning point.
“Buyer confidence is returning,” Mr Gill said.
“Sales volumes are likely to recover further during 2024.
“Particularly if inflation decelerates, we could expect the RBA to keep interest rates on hold, and eventually cut them.”
Analysts are widely forecasting the Reserve Bank of Australia to keep the cash rate on hold on Tuesday after its first meeting of 2024.
Last week, Australia’s Consumer Price Index data showed inflation was slowing, rising a modest 0.6% in the December quarter to end 2023 with an annual inflation rate of 4.1%.
Other notable data
In other findings from the PEXA report which focuses on trends in the mainland states:
- Both Sydney and regional New South Wales had a strong finish to 2023, with December recording the highest settlement volumes of the year
- Greater Melbourne recorded a strong December
- Regional Queensland continued to record higher transaction volumes than Brisbane
- Perth continued its consistently high settlement volumes since the pandemic property boom that started in late 2020
Commercial property outlook
For commercial property, the aggregate value of settlements was down across the eastern states for the 2023 calendar year, led by New South Wales.
Victoria and Queensland led commercial settlements on a volume basis last year.
Commercial transactions nationally also showed a spike in December across the eastern states, the PEXA report found.
Image by Maria Ziegler on Unsplash
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