Ausbiz | Will Higher Rates Take the Fizz Out of the Housing Market?

Oliver Hume Property Group chief economist Matt Bell features on Ausbiz, discussing the resilience of Australian property markets against a backdrop of rising rate uncertainty and global geopolitical tensions.

Bell describes the March home price gain of 0.7 per cent as stronger than expected, with Perth, Brisbane and Adelaide remaining the standout performers driven by population growth, interstate migration and constrained housing supply. He characterises Perth's quarterly surge of more than 7 per cent as unsustainable over the medium term, arguing these markets cannot continue growing at 20–30 per cent annually. Sydney is flagged as the most interest rate sensitive capital given extreme affordability pressures, while Melbourne — despite ongoing structural demand challenges — is emerging as a relative value opportunity compared to other capitals.

On construction, Bell highlights rising input costs — including fuel and petroleum-linked materials such as pipes and plastics — as a growing concern for the industry. He expects builders will ultimately need to pass these costs on to buyers, with already fragile high-rise apartment projects bearing the brunt of the impact.

While Bell has revised down his house price forecasts for FY26 in light of the shifting rate outlook, he continues to identify Melbourne, Adelaide, Perth and south-east Queensland as the most attractive markets for value-seeking residential investors.

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