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Three enduring insights for Australian home owners

From forever homes to investment properties, value is shaped and driven by big-picture trends over time. Through the highs and lows, it’s important to keep these enduring truths about home ownership front of mind.

Property has long been central to life in Australia. It’s a place to call home, and a springboard for your lifestyle and financial future.

In fact, property is a critical driver of household wealth in Australia and is broadly acknowledged by many as an important component of a comfortable retirement.

Because of its substantial contribution to the course of your lifestyle and finances, it’s important – especially during periods of flatlines and falls – to understand how the market tends to behave over time.

Through the ups, downs and occasional surprise, here are three recurring insights about the property market to help you stay in the driver’s seat.

1. For home owners or investors, value is in the long term

Short-term movements tend to dominate debate and conversation when it comes to the residential property market. Whether the market is riding high or enduring a downturn, property prices are a regular point of intrigue for Australians.

Of course, how the market is behaving in the short-term is important to understand – particularly if you’re planning to buy or sell through it. However, it’s the longer-term view of the market that is equally critical to keep in sight when it comes to values.

For context, over the last 10 years to 2023, national dwelling prices have appreciated 57.2%. In the last 30 years, national dwelling prices have appreciated 350.2%.1

These movements over time point to the old adage2: when it comes to value, it’s about time in the market, not timing the market.

“Looking back at the last 30 years – you would see volatility, but you would also see that asset values have increased,” says Pratham Karkal, Head of Personal Banking Direct at Macquarie’s Banking and Financial Services Group.

“So when you’re buying, when you’re investing, a long-term view on value is important.”

2. Prepare for highs and lows

The property market is a cyclical one, meaning it tends to be impacted by movements in the economy. In particular, the trajectory of the cash rate is an important driver of property prices in Australia.

Just as periods of both expansion and contraction are part and parcel of developed economies, so too are highs and lows in the Australian property market. For example, in approximately the last 20 years, there have been five full phases of the market.3

This is arguably one of the most important considerations in owning a home. It suggests home owners should be prepared for down periods, in both their mindset and with their strategies. This may include, for example, choosing to use an offset account where funds are both accessible, and helping to reduce interest payments over time.

“Ask yourself – ‘what if?’” says Karkal. “What if the market changes, what if interest rates change, what if my own circumstances change? From there, you can ask yourself questions about your home loan and your banking set-up, and if it’s designed for your needs in the long run.”

3. Our cities and regions move differently through cycles

Headline values and trends are a helpful indicator of how the market is broadly moving over time. However, when you’re buying or selling, it’s important to remember that the national market doesn’t necessarily move in exactly the same way through cycles.

In general terms, there are several drivers of housing prices, including interest rates, income, supply and demand. The cash rate is the same across Australia, and one of the factors that influences home loan interest rates. However, regional supply and demand, as well as income growth, are not the same across Australia – contributing to differences in medium-term housing growth.

It follows that Australian capital cities move at different paces to each other, and there are often differences in how metropolitan and regional areas are behaving through a cycle.

This is where doing your research, and thoroughly understanding the market you’re operating in, is essential. It may also mean that when other larger or different markets are dropping, that your property isn’t as significantly impacted, creating cause for calm.

This lesson rings true for the current cycle also. For example, data from the first quarter of 2023 shows cities like Perth and Adelaide have been relatively insulated from pricing falls, such as those experienced in Sydney, due in part to their comparative affordability. At the time, values in Perth had fallen 1% from their peak in 2022, compared to Sydney which had fallen 13.9%.4

Key take–aways

  1. Understanding how the market tends to work over time is critical to ensuring you’re making it work for you and your goals, rather than being bound by its ups and downs.

  2. Whether you own or are looking for a home to live in or an investment property, a long-term lens can help you with gains over time.

  3. Highs and lows are part and parcel of the Australian property market – it’s important to expect them, but not necessarily react to them, especially when prices fall.

  4. While the national market is broadly impacted by similar factors, such as movements in the cash rate, state-by-state and city-by-city pricing is not exactly uniform through cycles. When you’re buying or selling, it’s important to know the market you’re interested in well.

  5. This article was written by our friends at Macquarie.


Are you a home owner? Lee and the team at Fidget are ready to help you with all your refinancing needs. And as an independent broker, we don’t charge any fees! Book in a free 15 minute consultation here and let’s make it happen.


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