The 7 key insights into the Australian property market you need to know

Australian home values rose by 1.6 percent over the March quarter following an 8.1 percent increase in 2023, according to CoreLogic data. Historically, home prices have typically fallen as interest rates rise, but the opposite has occurred due to a lack of supply and high demand turbocharged by immigration.

While the optimists theorise that property doubles every seven years, pessimists talk about a bubble and inevitable crash. But AMP chief economist Shane Oliver says the Australian housing market “remains far more complicated than optimists and doomsters portray it to be”.

Here is a summary of Dr Oliver’s 7 key observations regarding Australian property.

1. It’s very expensive

This has been the case since the early 2000s but it’s been getting worse. House price-to-income ratios have doubled since the year 2000. The 2023 Demographia Housing Affordability Survey shows the median multiple of house prices to income at 8.2 times versus around five in the US and UK. The years taken to save a 20 percent deposit for an average full-time wage earner have doubled from five years 30 years ago to 10 years now. The expensive nature of Australian property … is leading to rising wealth and intergenerational inequality.

2. It’s very diverse

This has been seen recently with rapid relative price growth in Adelaide, Brisbane and Perth. This divergence partly reflects a combination of better housing affordability and relative population growth, with Brisbane and Perth benefitting from interstate migration.

3. Mortgage arrears remain low (for now at least)

The low level of arrears partly reflects strong lending standards in Australia combined with the strong jobs market and a high level of savings buffers coming out of the pandemic. That said, arrears are starting to pick up and the risks will rise as buffers run down, scope to cut discretionary spending is exhausted and if the labour market deteriorates significantly.

4. Interest rates still matter

The downtrend in mortgage rates since the late 1980s underpinned the surge in property prices over the same period as it enabled buyers to borrow more relative to their incomes. And rate hikes have been associated with cyclical price falls with rate cuts usually needed for upswings. But of course, the impact of interest rates can be swamped by other factors at times, as has been the case over the last year. Price gains are expected to be around five percent this year with high rates dragging but the supply shortfall supporting prices.

5. It’s chronically undersupplied

This has been the case since the mid-2000s when immigration levels, and hence population growth, surged and the supply of new homes did not keep up. The pandemic’s freeze on immigration provided a brief relief but this was offset by a fall in the number of people per household and the problem has worsened with reopening leading to record immigration levels. This has pushed underlying housing demand to around 250,000 dwellings p.a. at a time when home completions are around 170,000 dwellings a year. So, the shortfall of homes is getting worse and likely to reach 200,000 dwellings by June.

6. Forecasting swings in home prices is hard

Failed property crash calls have been a dime a dozen over the last two decades and forecasting property swings has been hard. For example, Reserve Bank Governor Michele Bullock noted last month that “I wouldn’t like to predict housing prices … every time we tried … we seem to get it wrong…”.

7. Property has similar long–term returns to shares

[Since 1926] both shares and property return around 11 percent pa. Property’s low correlation with shares, lower volatility but lower liquidity makes it a good portfolio diversifier. So, there is clearly a role for it in investors’ portfolios.

For Jack Freeman, a compelling interior should not look as though it was completed in a single shopping trip.

The founder and designer behind FREEMAN & CO prefers rooms that develop through art, travel, commissioned furniture and objects collected over time. It is an approach that treats the home less as a decorative project and more as an evolving portrait of its owner.

“I am a true believer in collecting versus decorating,” Freeman says.

That distinction underpins the international practice he has built across private residences, hotels, property developments, yachts and private aviation. Its projects stretch from Point Piper, Vaucluse, Circular Quay and Toorak to Mayfair, Bel Air and the Caribbean.

Although the locations and architecture vary considerably, the work is connected by a restrained design language. Natural stone, warm timbers and sculptural furniture establish the foundation, while art, bespoke lighting and individual objects give each interior its identity.

The objective is not to overwhelm a room with obvious symbols of expense. It is to create an environment that feels calm, layered and particular to the people living within it.

“The greatest luxury isn’t about excess,” Freeman says. “It’s about creating an oasis where you come home and feel immediately grounded — effortlessly chic and deeply personal.”

Collecting instead of decorating

Decorating can imply the completion of a room: selecting the required furniture, filling the available walls and producing a coherent finished image.

Collecting is less conclusive.

A collected interior has room to change as its owners travel, discover artists, inherit pieces or reassess how they use their home. Its character comes from the relationship between objects rather than adherence to a single brand or season.

That does not mean placing unrelated pieces together without discipline. The designer must understand scale, proportion, material and provenance well enough to create a dialogue between them.

A contemporary artwork might sit beside a historic piece of furniture. A precisely detailed new interior may be interrupted by an irregular object made by hand. Smooth stone can be balanced by timber, textiles or a patinated metal surface that becomes richer with age.

The tension between those elements is part of the appeal.

For Freeman, art is not an accessory to be added once the furniture plan is complete. It forms part of the architecture and atmosphere of the room from the beginning.

Lighting is considered in the same way. Beyond its practical purpose, a bespoke fitting can operate as a suspended sculpture, changing both the room’s composition and the way its materials are experienced after dark.

A design perspective shaped by travel

International travel plays a significant role in Freeman’s creative process.

Design fairs such as PAD Paris and Salone del Mobile in Milan provide opportunities to encounter emerging designers, established galleries, new materials and collectible furniture away from the filter of social media.

More spontaneous discoveries can prove equally important.

“Sometimes it’s the simple things,” Freeman says. “That piece found on a shopping trip with a client in Paris, stumbling across an artisan’s workshop, or a special memory that forms the narrative of the story.”

Objects selected during travel bring more than visual interest into a home. They carry an association with a place, maker or experience, giving the client a connection that cannot be reproduced by ordering an entire interior from a catalogue.

Freeman’s influences are international, but his projects are not conceived as replicas of Parisian, Milanese or Californian style. Each commission responds to its architecture, setting, natural light and the daily lives of its occupants.

A waterfront Sydney residence demands a different treatment from a Mayfair townhouse. A Caribbean estate shaped by brutalist architecture and reflecting pools calls for another response again.

The designer’s role is to absorb those references without allowing them to overwhelm the individual qualities of the property.

Designing the complete experience

FREEMAN & CO extends beyond conventional interior decoration.

The practice’s stated services include interior design and architecture, project management, property acquisition, development advice, concept design, documentation, furniture and lighting design, procurement and art curation.

That breadth allows the team to become involved before a room’s dimensions and finishes are fixed.

Early participation can be important at the top end of the residential market, where architecture, landscape, interiors, technology and art must operate as one environment. Decisions about ceiling heights, wall dimensions, sightlines and lighting can directly affect where art is installed or how custom furniture is proportioned.

The practice can then carry those decisions through to procurement and final installation, maintaining the design narrative as a project moves between architects, builders, specialist craftspeople, dealers and suppliers.

Its residential portfolio includes a South Coast retreat conceived as an escape from urban life, a Caribbean estate with reflecting pools, an East Coast-inspired Palm Beach residence and a Mayfair townhouse organised around an expressive drawing room.

The studio also says it has worked on highly tailored Sydney residences with values exceeding $100 million, although the private nature of such commissions means individual addresses and clients are not always disclosed.

A home that can keep changing

The risk in creating a perfectly resolved interior is that it can become too static — a composition that looks exceptional in photographs but leaves little room for life.

Freeman sees the home as something that should evolve with its owners.

“I love the evolution of design,” he says. “We are talking about people’s lives, and as they evolve, so too should their private sanctuaries.”

That evolution might involve adding art, reupholstering a significant piece, adapting rooms as a family changes or making space for objects gathered through future travels.

The original design needs to be strong enough to accommodate those layers.

This may be the clearest expression of Freeman’s approach to luxury. It is not simply access to rare stone, collectible furniture or commissioned craftsmanship. It is the creation of a personal environment whose meaning deepens rather than diminishes with time.

Fact box

Designer: Jack Freeman

Role: Founder and managing director

Practice: FREEMAN & CO

Base: Australia, with international projects

Project locations named by the practice: Point Piper, Vaucluse, Circular Quay, Toorak, Palm Beach, the NSW South Coast, Mayfair, Bel Air and the Caribbean

Sectors: Private residences, hotels, residential developments, private aviation and superyachts

Services: Interior design and architecture, property development, project management, property acquisition, documentation, furniture and lighting design, FF&E procurement, interior dressing and art curation

Design philosophy: Collected, personal interiors shaped by art, craftsmanship, travel and enduring materials

Website: free-man.co