A hot spring selling season forecast as property market roars back to life

Ray White boss Dan White is forecasting a bumper spring selling season for Australia’s property market, after the real estate company wrote a staggering $6.9 billion in sales last month.

August’s stellar result was 14 percent higher than the same month last year and only four percent down on 2021 when record home price growth was seen.

“Our August sales results officially certified the renewed and broad-based resurgence in the residential market that we have been seeing since late May,” Mr White said.

Dan White, managing director at Ray White

May was when Ray White saw a small “but identifiable” lift in new listings coming to market, particularly in the eastern states, he said.

“This was very unusual as new listings normally drop in the winter months. Interest rates were still rising, and given that the expectation was for an increasingly depressed market, was this a blip? But the trend became firmer in June, and stronger again in July.”

Ray White Group listed 10,500 homes in August, up 12 percent on last year and more than 20 percent higher than 2021.

And Mr White revealed the company’s pre-listing data shows a “strong” flow of more listings in the next few weeks.

“Buyers, including potential sellers that intend to repurchase, now have a lot more property to choose from. The market is very well-stocked for spring.”

Despite an increase in supply, buyer demand remains elevated across much of the country, meaning prices are likely to continue rising in the months ahead.

CoreLogic’s latest Home Value Index, released this week, shows home prices nationally inched upwards by 0.8 percent in August – the sixth consecutive month of growth.

Since bottoming out in February, prices at a national level are 4.9 per cent higher, adding $34,000 to the median value of a dwelling.

Sydney has led the recovery trend, with a gain of 8.8% since values found a floor in the Harbour City in January, while Brisbane has also seen values up 6.2% since bottoming out in February.

Ray White’s Lower North Shore Group posted $216 million in sales in August while Ray White Quakers Hill sold 135 homes.

Mr White is expecting the coming months – traditionally the busiest in real estate – to be just as busy.

“There will be enough stock to record some big results – maybe not at 2021 levels but not too far off,” he said. “So much depends of course on the broader economic sentiment and how that influences buyer behaviour.”

One likely driver of sustained buyer confidence is the decision this week by the Reserve Bank to leave interest rates on hold, which has led many economists to believe the tightening cycle is on hold for now.

For decades, Australia has leaned into its reputation as the lucky country. But luck, as it turns out, is not an economic strategy.

What once looked like resilience now appears increasingly fragile. Beneath the surface of rising property values and steady headline growth, the Australian economy is showing signs of strain that can no longer be ignored.

Recent data paints a sobering picture. Australia has recorded one of the largest declines in real household disposable income per capita among advanced economies.

Wages have failed to keep pace with inflation, meaning many Australians are working harder for less. On a per capita basis, income growth has stalled and, at times, reversed.

And yet, on paper, things still look relatively solid. GDP is growing. Unemployment remains low. But that growth is increasingly being driven by population expansion rather than productivity.

More people are contributing to output, but not necessarily improving living standards.

That distinction matters.

For years, Australia’s economic success rested on a powerful combination: a once-in-a-generation mining boom, a credit-fuelled housing market, strong migration and a property sector that rarely faltered. Between 1991 and 2020, the country avoided recession entirely, building enormous wealth in the process.

But much of that wealth is tied to property. Around two-thirds of household wealth sits in real estate, inflated by leverage and sustained by demand. It has worked, until now.

The problem is the supply side of the economy has not kept up.

Housing supply is falling behind population growth. Rental vacancies are near record lows.

Construction firms are collapsing at an elevated rate. At the same time, massive infrastructure pipelines are competing with residential projects for labour and materials, pushing costs higher and delaying delivery.

The result is a system under pressure from all angles.

Despite near full employment, productivity growth has stagnated for years. In simple terms, Australians are putting in more hours without generating more output per hour. The economy is running faster, butgoing nowhere.

Meanwhile, government spending continues to expand. Public debt is approaching $1 trillion, with spending now accounting for a record share of GDP.

The gap between spending and revenue has been filled by borrowing for decades, adding further pressure to an already stretched system.

This is where the uncomfortable question emerges.

Has Australia become too reliant on a model driven by rising property values, expanding credit and population growth?

As asset prices rise, households feel wealthier and borrow more. Banks lend more. Governments collect more revenue. Migration fuels demand. The cycle reinforces itself.

But when productivity stalls and debt outpaces real income, the system begins to depend on constant expansion just to stay stable.

It is not a collapse scenario. But it is not particularly stable either.

Nowhere is this more evident than in housing.

The National Housing Accord targets 1.2 million new homes over five years, yet current completion rates are well below that pace. With approvals falling and construction costs rising, the gap between supply and demand is widening, not narrowing.

Housing is also one of the largest contributors to inflation, with costs rising sharply across rents, construction and utilities. Yet the private sector, from small investors to major developers, is struggling to make projects stack up in the current environment.

This brings the policy debate into sharper focus.

Tax settings such as negative gearing and capital gains concessions have undoubtedly boosted demand over the past two decades. But they have also supported supply. Removing them may ease prices briefly, but risks deepening the supply shortage over time.

That is the paradox.

Policies designed to make housing more affordable can, in practice, make the shortage worse if they discourage development. The optics may appeal, but the economics are far less forgiving.

It is also worth remembering that most property investors are not institutional players. The majority own just one investment property. They are, in many cases, ordinary Australians using real estate as their primary wealth-building tool.

Undermining that system without replacing it with a viable alternative risks unintended consequences, from reduced supply to higher rents and increased inflation.

So where does that leave Australia?

At a crossroads.

The country can continue to rely on population growth and rising asset prices to drive economic activity. Or it can shift towards a model built on productivity, innovation and sustainable growth.

The latter is harder. It requires structural reform, long-term thinking and political discipline.

But it is also the only path that leads to genuine, lasting prosperity.

The question is no longer whether Australia has been lucky.

It is whether it can evolve before that luck runs out.

Paul Miron is the Co-Founder & Fund Manager of Msquared Capital.

A hot spring selling season forecast as property market roars back to life

Real estate leader says strong sales last month point to a busy season ahead

As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.