Value of Australian properties sold remains high

According to PEXA's most recent Property Insights report, Australia will record more than 730,000 property sale settlements nationwide in 2022, demonstrating how passionately Australians remain about real estate despite a year of record interest rate hikes.

Property sale settlements decreased nationally by 11.8% in 2022 from the record-high levels observed in 2021, but they increased by 16% in 2020 and by 24% in the pre-pandemic 2019.

With 194,849 settlements completed in 2022, Queensland had the most sales in the residential housing market. NSW, the neighbouring state to the south, saw the biggest decline in sale settlements for the year, with volume falling 18.1% from 2021 (177,555 sale settlements) and down 9% in aggregate value ($207bn).

Victoria experienced the least annual decline of the three major eastern states, recording 185,096 settlements for sales, a 10.6% annual decline, with a total value of $157.1 billion, an increase of 0.6% from 2021.

Despite having nearly 4,000 fewer sales settled in 2022 than in 2021, South Australia experienced the highest growth in settlement value, with a 12% increase to $33.8 billion.

The property market in Western Australia was the most resilient in 2022, with the number of sale settlements only falling by 3.6% YoY while the total value of properties sold increased by 12% to $54.1bn.

Victoria had the most commercial real estate settlements among the east coast states in 2022 with 12,522 commercial properties. Queensland came in second with 10,638 commercial real estate settlements, followed by NSW with 10,398.

Looking ahead, due to the most pronounced tightening of monetary policy in Australian history as well as other cyclical factors, the Australian real estate market will continue to moderate through 2023.

Australia's economy and real estate markets will be impacted by a number of factors in 2023. For instance, nett migration is returning to Australia, but its precise composition and timing are still unknown.

The anticipated large-scale return of foreign university students to Australian cities may cause a sudden and unanticipated increase in the demand for rental housing. On the supply side, the increase in weather-related weather events linked to climate change could further reduce housing stock in some areas, postpone necessary repairs, and increase the backlog of unfinished new homes.