Demand rose by 3.1% for houses and 1.9% for apartments in September 2016 alone. Victoria and NSW are currently the most in-demand markets in Australia, while both Tasmania and the ACT are also going strong.
“What we’re seeing is that demand on site is at all-time highs, driven predominantly by a lack of supply, particularly in Sydney and Melbourne,” said Nerida Conisbee, REA Group chief economist.
“Despite talk of oversupply and poor demand conditions, this result supports continued price growth in what are considered to be increasingly unaffordable markets.”
Among the most in-demand suburbs in Victoria include Warrandyte, Richmond, Brunswick, and Northcote. Meanwhile, the top four most in-demand apartments in NSW are Manly, Elizabeth Bay, Drummoyne, and Bellevue Hill.
However, all dwellings and housing demand is slightly below its peak April levels due to a softening of the WA market, which saw a 5.4% decrease in demand over the past 12 months.
“Conditions are very different in Western Australia where we continue to see low demand on site. The bottom of the market appears to be some way off,” said Conisbee.
Conisbee cited tax factors, as well as the strength of the Sydney and Melbourne markets, as reasons why people are not selling.
“The family home is not income-generating and investing for income attracts tax. Therefore, holding on to the family home remains the most tax-effective option for many prospective downsizers,” said Conisbee.
