After experiencing declining home prices, regulatory pressures from the Financial Services Royal Commission, and concerns over construction quality, Australia’s housing market took a dramatic turn in 2019, setting the stage for a much stronger 2020. The state election, multiple interest rate cuts, and tax incentives fueled a rebound, but the question remains—how will these factors shape the real estate landscape in 2020?
1. Housing Market Recovery is Well Underway
The Australian property market rebounded significantly in late 2019, driven by:
Buyers returned to the market in full force, but sellers remained cautious, creating a supply-demand imbalance that pushed prices higher.
2. Luxury Markets vs. Apartment Challenges
While the overall market showed recovery, performance varied by location and property type.
3. Factors That Will Slow Price Growth
Although home prices were rising, two key factors were expected to moderate the pace of growth:
4. Rising Rents Across Major Cities
Rental prices were expected to increase across most Australian capital cities, driven by:
The exception to this trend was Darwin and Sydney, where median rents had declined in 2019. However, Sydney was projected to see a slow recovery in rental growth.
5. First-Home Buyers Expected to Stay Active
Since May 2019, first-time homebuyers had increased their activity on realestate.com.au. The First Home Loan Deposit Scheme (FHLDS), launched in January 2020, was expected to further boost demand by:
6. The Impact of Bushfires on the Housing Market
The devastating 2019-2020 Australian bushfire season had a significant impact on housing markets in affected areas.
7. Affordability & Sustainability as Key Priorities
While rising home prices are seen as a positive for investors, affordability remained a growing concern:
Sustainability was also gaining traction, with more buyers prioritizing:
Energy-efficient housing designs to reduce costs
Final Thoughts
The 2020 Australian property market was poised for a strong recovery, but challenges such as affordability, rental supply, and bushfire rebuilding efforts were expected to shape the year ahead. While the luxury and first-home buyer markets flourished, investors remained cautious amid regulatory uncertainties.
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