by Sanjeev Sah | Nov 12, 2024 | Market Updates

Affordable housing is now the star performer in Australia’s real estate market, overtaking luxury homes in price growth, according to Ray White’s chief economist Nerida Conisbee.  

Ms Conisbee says this shift stems from “mortgage fatigue” as high interest rates hit those with large home loans the hardest, making affordable homes more appealing by comparison.  

This has led to greater interest – and higher prices – in established neighbourhoods, particularly with the rising cost of new construction meaning new builds are becoming pricier. 

Interestingly, though, the opposite trend is unfolding in the apartment sector, where luxury units are outpacing affordable options.  

Ms Conisbee explains that this is because equity-rich downsizers, unaffected by rate hikes, are driving demand for high-quality, spacious apartments. As this buyer segment is willing to absorb higher construction costs, luxury apartments remain strong while affordable apartment supply faces financial constraints.