What’s driving the housing markets: HTW

Demand for residential property remains strong, however the rate of growth is slowing, according to the latest Herron Todd White (HTW) Month in Review.

In the April report, National Director, Group Risk and Compliance, Kevin Brogan said it’s clear the rate of price growth has moderated overall due to several considerations facing potential buyers.

“Within the overall picture, some differences are opening up,” Mr Brogan said.

“Residential property price growth is still strong in Brisbane, Adelaide and Hobart, but of particular note is that residential property prices in the county’s two largest markets – Sydney and Melbourne – appear to have stabilised after a long run of strong price growth over the last year.”

Mr Brogan said increased listings are putting pressure on prices in both Sydney and Melbourne.

“The increase in the number of properties offered for auction has tested the depth of demand and as a result, clearance rates are reported to have slipped from their very high levels at the beginning of the year,” he said.

Mr Brogan believes that home buyers are now looking at both inflation and potential interest rate rises when weighing up whether to buy or rent.

“The probability of interest rate rises increases after the Federal Election,” he said.

Source: HTW

“Historically low interest rates have been a major factor in the strength of the property market over the last two years. 

“Fixed rate mortgage rates have been adjusting upwards and an increase in the cash rate might reasonably be expected before the end of Q3 2022.”

Supply chain issues are also putting pressure on construction costs, while uncertainty from the war in Ukraine and the fallout from the recent flood events are also impacting buyer sentiment, according to HTW.

Mr Brogan said first home buyers are also being deterred by high prices and the prospect of looming rate rises.

“Current first-time homebuyer activity is still significant but is well down from last year’s peak and is clearly impacted by affordability constraints, with many potential purchasers choosing to occupy rental property,” he said.

“This trend is contributing to very low vacancy rates and strong rental growth in many markets. 

“More investor activity is evident with record rental returns proving attractive, although yields have compressed with capital growth outstripping rental growth in most markets.”

Source: HTW


Buyer activity has been strong throughout the past two years across Sydney which has driven prices to record levels across the board.

HTW Director Shaun Thomas said the premium end of the market is now starting to show weakness.

“The top quartile of properties in Sydney has slowed at a quicker rate than the lowest quartile and middle 50 per cent of values,” Mr Thomas said.

“According to CoreLogic, in the three months to February, the top quartile saw just 0.5 per cent price growth, compared to 1 per cent growth for the rest of the market. 

“This is also becoming apparent in easing auction clearance rates and increasing days on the market.”

With affordability a key issue across Greater Sydney, locals are looking further out to areas like South West Sydney for the space they need, according to Mr Thomas.

“With most of Sydney already out of reach for the large majority of us, South West Sydney provides affordability, variety, value for money and great investment opportunities which have and will continue to fuel strong buyer demand out of a necessity to have shelter and a desire to grow wealth,” he said.


With property prices rising sharply across Melbourne in 2021, first home buyers, downsizers and retirees have started to gravitate towards more affordable assets such as units, apartments and townhouses.

HTW Director, Perron King said the hard-hit CBD is also likely to attract more interest given the lower prices on offer.

“First home buyers, young professionals and younger couples are the type of buyers likely to be lured into metropolitan apartments and the lifestyle that comes with them,” Mr King said.

“Interest should develop throughout 2022 as confidence in the market grows.”

Mr King said the south-east of Melbourne continues to perform strongly and expand, and the interest of buyers should remain steady throughout 2022. 

“Buyers are likely to vary as there is something for everyone in the south-east, from townhouses, house-and-land packages, beachside mansions and semi-rural properties,” he said.


Brisbane continues to be one of the strongest performing property markets in the country.

HTW Director David Notley said Brisbane is still seeing all market segments remain active.

“First home buyers filled the void left by investors in the inner-city apartment market over the past couple of years. We are seeing investors starting to come back into that space, so first homeowner activity may actually decrease a little here as the year progresses,” Mr Notley said.

Mr Notley said upgraders will continue to be an active sector in 2022 but at reduced levels compared to 2021.

“We’re seeing plenty of upgrader buyers looking to spend between $800,000 and $1.5 million on their purchase in the Brisbane region,” he said.

“Looking ahead, we think the upgrader and family market in the inner city will remain very active in 2022 as high demand for quality locations continues despite some of the headwinds around cost-of-living pressures and potential interest rate rises.”


The Adelaide market has continued its strong 2021 growth into the early stages of 2022 with the median metropolitan house price at a record high of $600,000.

HTW Director Nick Smerdon said the indicators suggest the market is still heading higher.

“Agents have been reporting strong buyer inquiry, shortened selling periods and purchase prices above vendor expectations in the early stages of this year,” Mr Smerdon said.

“The market is being driven by a mixture of buyer types. First home buyers, upgraders and downsizers continue to make up the largest proportion of buyers.”


Perth property has seen an uptick since the opening of the borders but has still not seen the strong gains that many locations across the East Coast have experienced.

HTW Director Chris Hinchliffe said all demographics have been active in the Perth market in recent months.

“Investors are very active capitalising on the strong yields on offer, first home buyers are fighting to capture affordable stock still on the market, while many families and upsizers are making the most of an increase in disposable income to upgrade to their dream home or location,” Mr Hinchliffe said.

Mr Hinchliffe said family-friendly suburbs continue to be a focus for buyers seeking space that is still close enough to the CBD to commute.


Much of the growth of the overall market since the beginning of the pandemic can be attributed to the first homeowner market, according to HTW Valuer Jeremy Callan.

“When talking about activity in the Darwin market overall, the general consensus is that this market has been dominated by the home buyer sector of the market since the beginning of the pandemic, with no real signs of this beginning to slow down,” Mr Callan said.

“Since mid-2020, almost all sales in Darwin have been sold to home buyers and owner-occupiers with sales volumes and results not seen since the Inpex boom of 2013.”

Mr Callan said it’s unclear which direction the homeowner market will go throughout 2022 across Darwin.


While the median house price across Canberra is now upward of $1 million, there’s still strong interest for property across the ACT, according to HTW Associate Director Angus Howell.

“There’s no evidence yet that the market has turned – agents are now reporting less of a buyer pool but still limited stock coming onto the market,” Mr Howell said.

“Uncertainty around interest rate rises, rising inflation and lower auction clearance numbers in recent weeks tell us there’s more caution than urgency in the property market right now.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.