Australia Real Estate Market Size, Share Analysis and Forecast Report (2024-2032)

Australia Real Estate Market Trends

The Australian real estate market is experiencing growth due to rising awareness of environmental issues, leading to heightened demand for energy-efficient homes and a preference for properties with green designs. At the same time, cities are investing in urban revitalization efforts, transforming underdeveloped areas into vibrant communities. This shift draws in buyers and investors looking for new Australia real estate market opportunities. In February 2024, Saint-Gobain announced a definitive agreement to acquire all outstanding shares of CSR Limited through an Australian scheme of arrangement. This acquisition presents a unique opportunity for Saint-Gobain to strengthen its position in the Australian construction market and align with its vision for sustainable building.

Government incentives, such as first-time homebuyer grants and tax benefits, improve accessibility and attractiveness in the housing market. Alongside historically low interest rates, these elements boost demand in the Australian real estate market. Furthermore, a robust rental market in urban areas provides investors with reliable cash flow and high occupancy rates. In April 2023, the Australian Government announced measures to enhance housing supply by reducing the withholding tax rate on eligible fund payments from managed investment trusts (MIT) for residential build-to-rent developments from 30% to 15%, and by increasing the capital works tax deduction depreciation rate for qualifying new build-to-rent projects from 2.5% to 4% annually.

Australia Real Estate Market Growth

The Australia real estate market is driven by a growing population and rapid urbanization, resulting in increased housing demand, particularly in major cities. Improved infrastructure and amenities present investment opportunities, while a robust economy with low unemployment and stable GDP growth promotes higher property transactions and value appreciation. According to the ABS, in January 2024, new residential construction values surged by 19.4% to $7.14 billion, positively impacting the Australia real estate industry revenue. These new residential projects attract both domestic and foreign investors, fostering competition and potentially raising property values in nearby areas.

The rise of innovative housing solutions, like modular and sustainable homes, meets changing consumer preferences and broadens buyer appeal, driving market expansion. Additionally, technological advancements such as virtual tours and online transactions improve buyer experiences and accessibility, attracting tech-savvy investors and further stimulating growth in Australia the real estate market. In Australia, technological advancements referred to as PropTech are transforming the real estate industry. Key trends include using AI for data analysis and client support, providing virtual tours for property viewing, adopting blockchain for secure transactions, employing IoT in smart buildings for real-time monitoring, using drones for property evaluations, and incorporating energy-efficient solutions to improve sustainability and property value.

Australia Real Estate Market Insights

• According to Industry Reports, Australia’s construction sector produces more than USD 162 billion each year, which accounts for approximately 10% of the national GDP.
• According to the Australian Bureau of Statistics, the value of non-residential buildings increased by 12.4%, totalling USD 4.92 billion in January 2024.
• According to ITA, the 2023-24 Federal Budget aims to enhance Australia’s ~$90 billion infrastructure pipeline with a National Urban Policy addressing job access, housing, services, climate challenges, and decarbonization.

Industry News

February 2024

NAB Green Finance for Commercial Real Estate supported clients in funding projects designed to lower greenhouse gas emissions. This initiative responds to Australia's transition to net zero and evolving consumer demands. With around 10% of the country’s emissions stemming from commercial buildings, reducing their environmental impact is essential.

November 2023

BESIX Watpac commenced construction on Eastwood Private Hospital with a 90 million investment aimed at transforming healthcare. The six-story facility will feature advanced amenities to improve healthcare services and minimise surgical wait times, with BESIX Watpac overseeing the project.

Australia Real Estate Market Drivers

Sustainable Development

The Australia real estate market is heavily influenced by sustainability, with developers focusing on eco-friendly designs, energy-efficient buildings, and sustainable materials to address the increasing demand for environmentally responsible living. Initiatives such as green building certifications and renewable energy integration are becoming standard practices. As the government targets net-zero emissions, both residential and commercial projects are focusing on reducing their carbon footprints. This shift not only attracts eco-conscious buyers but also enhances property values, drawing investment and boosting the Australia real estate market revenue. As regulations evolve, sustainability will be crucial for future developments. In May 2024, the Federal Government launched Australia’s first national Environmentally Sustainable Procurement Policy (ESPP), applicable to the procurement of construction services, textiles, ICT goods, and furniture. The ESPP aims to increase local demand for recycled products and promote environmentally friendly choices that minimize greenhouse gas emissions and provide long-lasting value.

Urbanization and Housing Demand

The Australia real estate market is characterised by rapid urbanization, driven by population growth in major cities. This rising demand for housing, especially in urban areas, is leading to higher property prices and an urgent need for new developments. As young professionals and families migrate to cities for job opportunities, the need for affordable housing options is growing. Urban revitalization initiatives are in progress to develop vibrant communities with enhanced infrastructure and amenities. This trend not only elevates residential property values but also strengthens local economies, making urban areas more appealing for investment. According to the ABS, in August 2024, employment rose to 14,458,600, with the employment-to-population ratio increasing to 64.3% in Australia. This boost in employment typically correlates with heightened rental demand, particularly in urban centers, further driving the real estate demand growth.

Opportunities in the Australia Real Estate Market

Government Incentives and Policies

The Australia real estate market is experiencing growth due to government initiatives and incentives. Programs designed to assist first-time homebuyers, such as grants and reduced stamp duty, are making homeownership more attainable. Additionally, policies that promote sustainable development and affordable housing are influencing new projects. The government's dedication to boosting housing supply in response to increasing demand is spurring investments in infrastructure and urban development, which, in turn, is supporting the Australia real estate industry revenue. The Australian Government works alongside state and territory governments to ensure consistent regulations through the National Construction Code (NCC), facilitated by the Building Ministers' Meeting and the Australian Building Codes Board (ABCB). In 2023, amendments to the NCC were implemented to enhance bushfire protection, structural integrity, and waterproofing standards, with new energy efficiency requirements set to take effect in May 2024.

Market Restraints

The Australia real estate market faces several significant restraints. Rising property prices make homeownership increasingly unattainable, especially for first-time buyers, as housing costs outstrip income growth. Regulatory complexities can delay development projects while fluctuating interest rates affect borrowing costs and buyer confidence. Economic uncertainties, including shifts in unemployment and GDP, can reduce investment and housing demand.

Additionally, supply chain disruptions hinder construction timelines, and changing demographics impact housing demand patterns. Environmental concerns require developers to adopt sustainable practices, often increasing costs. Lastly, market saturation in certain areas leads to decreased property values, deterring new investments and slowing growth in the Australia real estate market.

Australia Real Estate Industry Segmentation

Australia Real Estate Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Property

• Residential
• Commercial
• Industrial
• Land

Market Breakup by Type

• Sales
• Rental
• Lease

Market Breakup by Mode

• Online
• Offline

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Real Estate Market Share

By Property Analysis

The Australia real estate market thrives on residential properties, which maintain stable demand due to the fundamental need for housing, leading to consistent occupancy and rental income. Properties typically appreciate over time, offering capital gains. Investors enjoy tax benefits such as negative gearing and depreciation. The diverse market serves various demographics, while residential developments improve community infrastructure and overall quality of life, further boosting real estate demand. In August 2024, Walker Corporation's "Future Appin" project aimed to tackle Sydney's housing crisis by proposing over 9,000 new homes in the Macarthur region, alongside more than $2 billion in crucial infrastructure, including water, sewage, shops, and transport corridors.

The Australia real estate market is being strengthened by commercial real estate, which offers higher rental yields than residential properties, attracting investors seeking greater returns. Longer lease terms provide stable cash flow, and many leases shift property expenses to tenants, minimizing risks for landlords. This sector offers diversification and is generally more resilient during economic downturns, providing opportunities for Australia real estate market development through renovations or repositioning. In September 2024, Fortescue began preliminary construction on its first commercial-scale green hydrogen project in Queensland, initiating the 30MW phase of the PEM50 electrolyser installation. This project aims to produce up to 8,200 tonnes of green hydrogen annually, starting in 2025.

Australia Real Estate Market Regional Insights

Australia real estate market is diverse, featuring strong demand for residential properties driven by population growth and urbanisation. Investors benefit from potential capital appreciation and tax incentives. Commercial properties provide higher yields and stability, while industrial real estate experiences rising demand driven by e-commerce and the necessity for logistics hubs.

According to the Australian Bureau of Statistics, in March 2024, total dwelling commencements increased by 0.5% from March 2023, reaching 39,715 dwellings, while new private sector house commencements rose by 4.8% to 25,072. In June 2024, total construction work done rose 0.1% to $64,932.1 million, and engineering work increased by 0.5% to USD 31,117.1 million compared to June 2023.

Competitive Landscape

The Australia real estate market key players are committed to delivering exceptional customer service and utilizing innovative marketing strategies. With a strong network of agents and a focus on leveraging technology, they work to enhance the buying and selling experience.

Key Industry Players

Hauss Pty Ltd: Established in 2019 and headquartered in Melbourne, Hauss Pty Ltd specializes in innovative real estate solutions, focusing on enhancing client experiences through technology-driven services and personalized support. The company aims to redefine property transactions with a modern approach and exceptional customer care.

Ray White: Founded in 1902 and based in Queensland, Australia, Ray White is one of the largest real estate agencies in the Asia-Pacific region. With a vast network of offices, the company offers comprehensive residential and commercial property services, prioritizing client satisfaction and market expertise in every transaction.

The Agency Sales Pty Ltd: Established in 2016 and headquartered in Perth, The Agency Sales Pty Ltd is a modern real estate agency that leverages technology to streamline property buying and selling. The company aims to provide a superior client experience through innovative practices and a strong focus on marketing.

McKean McGregor Pty Ltd: Founded in 1991 and based in Tasmania, McKean McGregor Pty Ltd is a reputable real estate agency specializing in residential and commercial properties. The firm is known for its commitment to client satisfaction and local market knowledge, offering tailored solutions for buyers and sellers alike.

Other key players in the Australia real estate market report include McGrath Limited, eXp World Holdings, Inc., CBRE Inc., Luxury Real Estate Agents, Hooker Corporation Limited, and Harcourts Group, among others.

Recent Developments

August 2024

United Arab Emirates-based property developer Arada entered the Australian property market with a new Sydney base, planning multiple projects across NSW. It launched its first project in Castle Hill, having invested around USD 200 million in five sites, while already building 9,000 homes and managing another 21,000 in its home market.

February 2024

NAB Green Finance for CRE aimed to assist commercial real estate clients in funding projects designed to reduce greenhouse gas emissions. As Australia moved toward net zero, the bank supported its customers in adapting to changing consumer demands and decarbonizing, addressing the significant emissions from commercial buildings.