The Australian real estate market mains to be one of the world’s most vibrant and resilient markets.

For over a century, it has been an attractive investment option for local and international investors.

As we look to 2023 and beyond, there are a number of key trends that we can anticipate to shape the Australian real estate market.

Trends

First and foremost, it is expected that the population of Australia will be on the rise.

By 2023, the population is anticipated to reach approximately 30 million, creating an increased demand for housing that is projected to drive prices up.

Additionally, increased population growth and expansion in the major cities are likely to create higher demand for luxury properties and properties located near amenities and in highly sought-after locations.

Another trend that is anticipated in the coming years is the steady growth of the rental market.

With growing populations and home prices on the rise, more and more Australians are likely to turn to rent as an affordable and flexible alternative to homeownership.

As this trend grows, investors will have an attractive opportunity to create and build a portfolio of rental properties that can generate income and secure long-term investment.

There have been a number of initiatives rolled out by the government to address the issue of housing affordability. In the coming years, we expect to see policies, which favour first-home buyers who may not have the ability to compete in the current property market.

Additionally, there is a chance that we could see incentives and tax breaks to encourage more incentives and investment in low-cost housing and long-term housing solutions.

Challenges and shortcomings

The Australian Real Estate sector is expected to face a number of challenges over the coming years due to changing prices, increased competition, and governmental intervention. With the population projected to grow to over 25 million by 2023, the strain on the sector is likely to increase and cause further changes across the market.

One challenge is likely to be the rising prices of property. Prices around Australia have already been rising steadily since the mid-2000s, and with demand continuing to increase and the competition for property increasing, prices are likely to continue to rise.

This may be beneficial for real estate investors, but for those looking for affordable housing it could be a challenge.

In areas of high demand, the cost of entry level housing could become prohibitive to many in seriously hampering demand of real estate.

Another challenge is likely to be increased competition from foreign investors. Since the onset of the global financial crisis, foreign investment in Australian real estate has grown considerably to a point where it accounts for 16% of total transaction in the market.

This increase in competition makes it harder for those already in the market to buy property and could make the market more volatile as foreign investors can quickly move in and out of the market.

Changes in governmental policy may also present a challenge for Australian real estate in 2023. Policies such as negative gearing, changes to interest rates, and taxation of property investors could all have an impact on the market.

Lessons to learn

The government is also likely to intervene to address housing affordability, with policies such as stamp duty concessions or restricting development in certain areas being possible.

These policies could have a profound effect on the Australian real estate market, making it harder to predict or plan for the future.

In the coming years, there is also anticipated to be an increased focus on sustainable housing.

Governments, councils, and individual homeowners are likely to encourage solutions and develop new technologies in order to better assess and maintain sustainable housing solutions.

As this trend grows, people will be presented with more opportunities to invest in energy-efficient and eco-friendly initiatives that can ultimately defray some of the associated costs with the ownership of an Australian real estate market.

Promising year for real estate

Overall, 2023 is shaping up to be an exciting time for the Australian real estate market. As its population grows and the demand for housing and rental properties rise, we can expect to see an increase in investment as well as more innovative solutions for sustainable housing solutions.

As investors and potential homeowners alike make their decisions, it is important to consider the growing trends and changes expected to shape the Australian real estate market in the coming years.

By responding to these changes quickly and intelligently, the sector can work to ensure its continued success in the future.