Shortest market downturn on record as property prices rebound
Growing expectations of an interest rate cut have boosted market sentiment, according to Ray White.

HOUSES prices bounced back in January after just one month of declines, Ray White is reporting.
“This swift reversal could potentially rank among the shortest market downturns on record,” says Nerida Conisbee.
The resurgence appears to be driven by several key factors, according to the firm’s chief economist.
Growing expectations of an interest rate cut have boosted market sentiment. It would increase buyers’ borrowing capacity and reduce mortgage payments for existing homeowners.
A reduction in new listings, combined with more cautious seller behaviour, has created tighter market conditions, she says.
“Once interest rates do decrease, we could see a rapid shift from the buyer’s market experienced in late 2024 to conditions favouring sellers,” she said.
But for those hoping for more affordable housing, the outlook long term suggests continued price growth, albeit with occasional brief periods of decline.
Undersupply in the Australian housing market is the main reason.
“The supply constraints facing the market are multifaceted and deeply entrenched. The construction industry is operating at capacity, while decades of undersupply have created a significant construction backlog,” she added.
“This is compounded by a fundamental mismatch between available housing stock and shrinking household sizes.
“Construction timeframes have permanently extended, and the industry faces workforce challenges with an aging labour pool that isn’t being replenished quickly enough.
“These structural constraints effectively create a floor for housing prices and limit the potential for significant price reductions.
“The supply-side challenges represent a complex, long-term issue with no immediate solutions, suggesting sustained upward pressure on housing prices for the foreseeable future.”
The two-speed nature of Australia’s property market continues to be evident in the latest figures, according to the economist.
While Perth maintains strong momentum with 16.7 per cent annual growth and Adelaide shows robust performance at 10.2 per cent, the larger southern capitals remain in a slower growth pattern.
Melbourne’s mere 0.1 per cent annual growth, Canberra’s 0.7 per cent, and Sydney’s 3.1 per cent reflect this ongoing divergence.