The index is produced by the REA Group, owner and operator of realestate.com.au, and provides data and insights about residential dwellings across Australia.
Nerida Conisbee is the author of the index and says demand for property peaked in October and November, dropping out only slightly to close 2016, with the index falling 6.6% nationally in December.
She says property price hikes aren’t likely to be as severe as they were in 2016.
“While still early into the new year, the easing of demand nationally suggests that the record price rises we saw in Sydney and Melbourne last year are likely to be more subdued as we move further into 2017,” Conisbee says.
“The key drivers of this demand decline are likely due to Australian banks increasing interest rates for buyers independently of the Reserve Bank of Australia in late November and early December and continuing affordability issues across the Eastern seaboard.
“Given the RBA has indicated that it may still cut the cash rate further, the banks have sent strong signals that they will respond by not passing cuts onto borrowers and we expect out of cycle interest rate rises by banks to continue. This will be a key issue for borrowers this year, especially first home buyers and investors, with access to cheap money becoming more difficult.”
The REA Group Property Demand Index is produced by the REA Group, owner and operator of realestate.com.au – the leading source in Australia for residential property with a total average unique audience of more than 5.9 million (Nielsen Digital Ratings (Monthly), June-November 2016).