Subject: Two markets, two signals

⚡️ Highlights:

1. Established housing market: Sales remain high while resale supply is low, leading to a tight market with limited options for buyers and potential sellers choosing to stay put due to various factors such as mortgage rates, demographics, transaction costs, limited choices, and investment equations.

2. New housing market: Population growth has driven demand for new housing, leading to a surge in completions and construction costs. However, as population growth normalizes, new housing demand is also easing, suggesting a move towards balance rather than chronic undersupply.

3. Interaction of forces: The tight established housing market and the rebalancing new housing market are shaping the overall housing market dynamics. If resale listings remain low and new supply catches up to moderating demand, we could see a period of stable price growth rather than surges.

4. Flows in housing markets: Housing markets are defined by the flows of people, credit, and stock. Currently, the established market remains tight while the new market may be quietly rebalancing, particularly for owner-occupiers.

5. Future housing trends: If the trend of a tight established market and a rebalancing new market continues, the next chapter in Australia's housing story may look very different from the narrative that has dominated since the pandemic, with potentially more stability and balance in the market.

✍️ Matusik Missive | Full Article

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