Property sales were down over the past year, but green shoots appearing in the second half of the financial year show positive signs of recovery, property settlement platform PEXA announced this week.
PEXA’s FY23 Property Insights Report has revealed that more than 665,000 property settlements were recorded nationally in FY23. This number was 18.6% lower than the previous boom year of FY22 (754,352), but remained 11% higher than immediately prior to the COVID pandemic in FY20.
The result was driven by a soft first half, with all states recording some shrinkage.
However, settlement numbers recovered from March 2023 onwards and the financial year finished strongly with more than 66,000 recorded in the month of June – up from 58,000 in May and 48,000 in April – signalling a rebound in volumes.
The report, which provides a comprehensive view of property sale settlement trends in Australia for the financial year ending June 2023, compared settlement trends over the past four years, focusing on the five mainland states of NSW, Queensland, Victoria, WA and South Australia.
PEXA’s Head of Research Mike Gill said that while settlement figures in FY23 were lower than the previous year, there’s good reason to be optimistic for the year ahead.
“As the interest rate cycle approached its peak, we saw significantly fewer sale settlements recorded across the 2023 financial year, compared to FY21 and FY22 although they have still remained higher than levels experienced during the onset of the COVID pandemic”, Gill said.
“Despite a soft start to the year, residential sale settlement volumes picked up from March across all mainland states, with June settlement volumes finishing the year strongly – at comparable settlement numbers to the prior boom year.
“This suggests the market has already bottomed out and is beginning to recover as we enter FY24.”
Gill noted that despite higher interest rates and other headwinds, there is still a strong demand for housing in Australia with settlement volumes starting to bounce back.
“There are a number of factors that will continue driving the property market this year, including increased net migration, the trend toward smaller households, low volumes of new listings as sellers wait for the market to improve, and a very tight rental market,” he said.
PEXA’s research found $603 billion was spent on property in Australia in FY23, greater than the amount spent in FY21 and FY20 ($546.2 billion and $408.8 billion respectively), reflecting the increase in average selling prices over that period.
