The property market is navigating a complex environment of high interest rates and rising median prices, making homeownership increasingly challenging for many, according to Karen Dellow (pictured above), senior audience analyst at PropTrack.
“The market is currently going through a period of high interest rates and high median prices, making it difficult for many people to buy property,” Dellow said.
The demand for affordable homes has surged as buyers face reduced borrowing power due to high home loan rates.
“High home loan rates have reduced buyers’ borrowing power, leading to increased demand and higher growth rates for more affordable properties,” Dellow said.
This trend is particularly evident in the 15th percentile of property prices, which has seen consistent growth over the past five years.
Despite affordability challenges for the majority, the high-end property market continues to show significant growth.
Dellow noted that properties in the 85th and 95th percentiles have outpaced the national median in price growth since the rise in interest rates.
“While many buyers are adjusting their budgets and purchasing more affordable homes, others are not restricted by price,” she said.
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The growth trends vary significantly across Australia’s major cities.
Adelaide saw balanced growth across all market tiers, while Sydney’s luxury market outperformed its lower-end segment.
“Sydney’s lower percentiles grew much less than its higher percentiles, with 8% growth in the 75th and 85th percentiles compared to just 2% in the 15th percentile,” Dellow said.
Despite the ongoing challenges of high interest rates, the property market remains robust, driven by strong demand across both affordable and premium segments.
“While affordability challenges loom large for many prospective buyers, the property market remains buoyant across all segments,” Dellow said.
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