What Are Valuers Predicting For Property Markets?

Recently, real estate firm CBRE released the results of their residential valuer survey for Q1 of 2024.

The results of this survey offer some valuable insights into the observations of ~190 CBRE valuers around the country.

In today’s article, we’re taking a look at some of the key results, and offering some brief commentary of our own:

According to CBRE’s report, 6x as many valuers are expecting ‘strong to very strong’ demand, Australia wide, as opposed to ‘soft or very limited’ demand.

Valuers note also that demand has been the most significant in a few key markets, namely – Perth, Adelaide and Brisbane:

These valuer observations would seem to be corroborated by certain forecasts elsewhere, such as SQM’s 2024 Boom & Bust Report:

In all four of the potential scenarios considered in SQM’s report, only Brisbane and Perth were predicted to experience positive price growth. Adelaide was close behind, with negative price predictions for only two of four scenarios, while all other cities were predicted to have a non-zero chance of a price contraction across all four scenarios.

With the benefit of some hindsight following the release of these forecasts at the end of last year, it seems that the situation has been trending more closely towards scenario 3 – particularly with recent population figures continuing to exhibit a strong upward trend:

However, somewhat surprisingly, valuers expect peak demand regions to shift significantly over the coming 12 months. Alongside broader expectations of a lift in demand across the board, the ACT, Melbourne – Outer Metro, and Sydney Metro have been tipped to receive the largest growth in demand:

For Sydney and Melbourne in particular, this is an interesting prediction in light of recent quarterly price change figures:

Following a steady decline in growth since early last year, Sydney and Melbourne are showing some signs of having turned a corner in early 2024 (at least on a rolling three-month basis). For the meantime, though, Melbourne prices are continuing to go backwards, with immediate demand focussed elsewhere.

Once again, CBRE’s valuer expectations of future house price growth seem to support the underlying data and other forecasts:

Foresees the next cut occurring in September 2024, with the cash rate projected to fall to 3.10% by December 2025.

Australia wide, the most common prediction for property over the next 12 months was an increase in prices of less than 5%, while Perth was the standout in terms of expected city-level house price growth.

In support of the early signs of Sydney and Melbourne’s resurgence, a sizable share of valuers seem confident that Sydney and Melbourne will outdo their recent performance. Unsurprisingly, Adelaide and Brisbane once again ranked highly among these predictions.

Brisbane Metro has just barely edged out the Gold Coast and the Sunshine Coast markets collectively, though both are well ahead of Sydney Metro in third. Compared to house price growth expectations, the Australia wide expectations of apartment growth seem to be far more moderated. The breakdown indicates that a majority of valuers expect relative stability across apartment values, compared to expectations of moderate overall growth among house prices.

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