Australia’s property market is showing signs of a rebound despite a series of the largest and fastest interest rate rises in a decade, said the group that operates Australia’s leading residential and commercial property websites.
REA Group currently operates many leading property websites in Australia including residential property website realestate.com.au, share property website flatmates.com.au, and property research website property.com.au.
It is reported that new “buy” listings were down by 12 percent in the 12 months due to a slowing market and strong comparatives the year prior.
Even though there was a reduction of 5 percent in new residential “buy” listings across the country, Sydney and Melbourne listings both increased by 9 percent.
The report states that demand remains healthy and is driven by strong fundamentals, returning house prices to positive growth. Prices have steadily increased by 2.8 percent since February after falling 4.1 percent from March to December in 2022.
The residential yield growth is anticipated to grow to double-digits in FY24, being driven by a national average price rise of 13 percent in prices and a rent price rise of 8 percent.
Average asking prices have risen again due to the increase in buyer inquiries.
“The fundamentals of the Australian property market remain healthy,” Mr. Wilson said, reported AAP.
“We are continuing to see strong demand and a return to price growth, and this is converting to a more attractive market for sellers.
“We believe stabilisation of interest rates is within sight and expect this will lead to an increase in market activity,” Mr. Wilson said. “Part of it is, more listings drive more listings.”
Although seller confidence continues to be impacted by the uncertainty in interest rates and there is a lack of supply in both buy and rent property inventory, demand remains strong, with Australian property prices expected to return to growth in 2023.
“All of that points to a strong market and whether we get another rate rise, I don’t think is going to impact it,” Mr. Wilson said.
Property Website Still Popular Despite Rising Interest Rates
Despite the rise in interest rates, Australians are still looking at properties, with REA Group’s flagship website, realestate.com.au, still coming out at the top when it comes to Australia’s number-one address in property.“The delivery of more personalised experiences is central to this growth and is rapidly increasing the depth and frequency of audience engagement.
“This demonstrates both the growing value consumers are placing on access to high quality information, and the underlying strength of demand in the property market.”
The REA Group report also reported an annual growth of 18 percent in active members.
During a parliamentary hearing on Aug. 11, Reserve Bank of Australia Governor Philip Lowe, attributed the housing market’s recovery to households’ perception that interest rates were about to peak.
Mr. Lowe said that while higher interest rates caused difficulties for a portion of the population, many people also benefited from it, noting that he had received letters thanking him for lifting the cash rate.
“For many years, I got letters from people bemoaning the low level of interest rates,” Mr. Lowe said.
“They’re relying on interest income, and the interest rate was zero, so they weren’t getting an income. And now they’re getting more income.”
Using AI In Property Websites
REA Group used ChatGPT to increase engagement on one of their hallmark personalisation experiences, the suggested properties feature, by having ChatGPT write up a top feature for each listing on the suggested properties carousel on the home screen, they revealed in an article on its experience with artificial intelligence (AI).In the July report, the use of AI has also helped to deliver unique consumer experiences such as realEstimate—which provides more accurate and information property valuations and AI-powered suggestions—that deliver personalised recommendations and suggestions to consumers.
REA Group Chief Product and Audience Officer Melina said the realEstimate automated valuation tool was now being used to track over 35 percent of Australian households.
Although the REA Group reported a net profit after tax of $372 million (US$241.8 million), down from 9 percent the previous year, their revenue increased by 1 percent to $1.18 billion (US$0.77 billion) and operating expenses increased by 7 percent to $532 million (US$345.8 million).
Overall REA Group said in the report that they are well positioned for growth in FY24 with strong product pipelines and AI developments to leverage market recovery.
