Welcome to our latest Australian Property Market Update, where we explore the latest trends and factors affecting the property market in 2024.
The Australian property market has shown unprecedented resilience in recent years, thanks to low interest rates, population growth, and supply shortages. However, housing affordability has now become one of the biggest issues of our generation.
So is The Great Australian Housing Crash imminent, or is the property Market stronger than ever? To find out, let’s look at the current state of the market. In this article, we will provide an in-depth analysis of the current state of the Australian property market for home buyers and investors looking to navigate the market in 2024.
Let’s dive in.
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What's Happening In The Australian Property Market.
Looking at the data, the market is looking surprisingly resilient, showing strength and a positive trajectory. Actually, residential property listings plunged 5.2% nationwide in December 2023. The total number of listed properties dropped to 234,000 from 247,000 the year before.
Property growth and the supply of dwellings have had a pretty big impact, outweighing the effects of the cash rate. Australia’s population grew by 563,000 people over the year to March 2023, an increase of 2.2%. This is the largest increase in Australia’s population on record and the highest growth rate since 2008.
We’ve also seen consistently high auction clearance rates, which are pretty much the signs of a healthy market. Sales volumes surged 15.5% compared to the same time last year after the reserve bank increased the rates 13 times.
Plus, while national property prices were expected to decline between 7% and 10% in 2023, they actually fully recovered from the 2022 losses and even set a new record! In 2024, property prices are expected to continue rising but at a slower pace than during the recovery.
Most experts are predicting interest rate cuts this year, which may increase demand for housing and drive up property prices. However, mortgage affordability is now at its worst since 1990, which may slow down the rate of growth of the housing market.
It’s important to remember that property market trends can be cyclical, and downturns often present opportunities for savvy investors to secure properties at a lower price point. Let’s take a look at the market data in more detail.
Australian Dwelling Values Overview
The Australian property market has experienced some fluctuations over the past year. However, recent data suggest a positive trend.
National home values actually increased in the 3 months to December. Over the past 12 months, dwelling values in Australia have risen by 8.1%, which is higher than the -4.9% fall in the year ending 2022.
These changes present an optimistic outlook for the Australian property market.
Overall changes in dwelling values across Australia
Australian Dwelling Values - Past 3 months
The Australian property market is always evolving, and the latest data suggests that there have been some ups and downs over the past few months.
But don’t despair, as there are still some areas of growth that we can celebrate. The 3-month changes in Australian dwelling values present a snapshot of the current state of the market, showing some regions experiencing growth and others experiencing a decline.
While there was an overall increase of 1.5% in national home values, it’s worth highlighting that Regional WA has experienced significant growth of 3.6%%.
Regional NT is the only region to experience a decline of -3.1%
In the capital cities, there has been an increase in dwelling values for Perth, Canberra, Adelaide, Brisbane, Sydney, Darwin and Hobart. Melbourne is the only city that has experienced a decline in dwelling values, but it is a modest -0.2%.
Australian Dwelling Values - Past 12 months
The Australian property market is always in flux, with the latest 12-month data showing a mix of growth and decline.
There has been an overall increase of 8.1% % in national home values, and it’s important to note that this is significantly higher than the decline of the previous 12 months.
Regional NT’s property market has experienced the highest decline in the 12 months to December, with property values declining by -4.9% in 2023. Only 2 other regional areas are still in decline— regional Tas (-0.1%) and regional Vic(-1.6%). Regional SA has experienced significant growth of 9.4%, with regional WA and regional QLD following closely at 8.4% and 8.7%.%. Additionally, some capital cities have seen double-digit growth, with Perth, Brisbane and Sydney experiencing growth of 15.2%, 13.1% and 11.1%% respectively.
Two capital cities have experienced some decline in the past 12 months. Hobart has experienced a decline of -0.8%, and Darwin has experienced only a modest decline of -0.10%.
Based on this data, it is important to remember that the market is constantly evolving and that there are still areas of growth in the Australian property market.
Median Days On Market
The median days on market statistic provides an important insight into the health of the Australian property market. This metric indicates the average number of days that properties are listed on the market before being sold. As of December 2023, the overall median days on the market for Australia is 30, which is a slight decrease from 31 days last December.
Additionally, the median days on market for combined regionals is 41, and for combined capitals, it’s 27, down from 29. These numbers suggest that properties are taking a slightly shorter time to sell across Australia, both in regional and capital areas.
An decrease in the median days on market can signal high demand in the housing market, where demand is higher than supply. The shorter the properties sit on the market, the more likely it is that sellers will increase their prices as buyers compete for properties. This trend could lead to an increase in property prices in the future.
However, it’s important to note that this statistic can also be influenced by other factors, such as seasonality, changes in government policy, and local economic conditions. Therefore, it’s not necessarily an indicator of an immediate downturn or upturn in the property market.
Overall, the decrease in median days on the market across Australia suggests that the property market may be entering a more competitive phase. However, other factors, such as interest rates, government incentives, and population growth, can still affect the market in the short and long term. It’s essential to monitor this metric along with other indicators to get a complete picture of the property market’s health.
Vendor Discount
The average vendor discount is a metric that shows the difference between the original asking price of a property and the final selling price.
A lower discount indicates that sellers are now offering fewer discounts, possibly due to steadily rising demand in the market.
According to recent data from CoreLogic, the average vendor discount has decreased for all regions of Australia from the previous quarter.
In Australia as a whole, the average discount has decreased from -4.30% to -3.5% between December 2022 and December 2023. This indicates that sellers are now less willing to accept lower prices.
However, it is important to note that the discount rate is still relatively low, which suggests that demand for property remains strong in Australia. In conclusion, the decrease in the average vendor discount suggests that the property market in Australia is still relatively healthy, and buyers may still have opportunities to negotiate a better deal.
Mortgage Rates
The Reserve Bank of Australia’s (RBA) recent statement indicates that global inflation is still high but moderating due to lower energy prices, improved supply chains, and tighter monetary policy.
According to the CBA, inflation is forecasted to be back at 3% by the end of 2024. However, some experts are predicting that inflation will not decline to RBA’s desired 2-3% until the end of 2025. GDP growth is expected to slow to 1.5% in 2024, and unemployment is projected to reach 4.5% by mid-2025.
The RBA is closely monitoring labour costs, which are rising from recent low rates.
The big four banks expect that interest rate cuts will occur towards the end of the year since inflation is beginning to go down. These factors will impact mortgage rates for the Australian property market.
Market Analysis - Capital Cities
Now that we’ve taken a look at the overall Australian property market let’s dive deeper into the market for the country’s capital cities. The capital cities often hold a significant portion of the property market and are home to many of Australia’s major industries and institutions.
The property markets in these cities have seen significant changes, with some experiencing growth and others declining in value. By examining the data and trends for each city, we can better understand the current state of the Australian property market and what it means for homebuyers and investors. So, let’s take a closer look at each capital city and see how they have fared in the past year.
Sydney Property Market
In December 2023, the Sydney property market prices rose by 0.2%. However, affordability remains an issue, and buyers are acting with caution until there is more clarity about when rates will settle. In fact, Sydney houses are now double the price of units after reaching a new high in the December quarter. This makes it very difficult for homebuyers to upgrade from a unit to a detached home.
However, confidence in the market appears to be growing, and more investors are recognising that bargains can be found.
According to a report, property prices are forecast to increase across all capital cities in 2024
In the next 6 months, the Sydney property market is expected to increase further, and once buyers and sellers see that inflation is under control and interest rates stop rising, they will step back into the market.
The long-term outlook for the Sydney property market remains strong, with a unique lifestyle and economic benefits that will attract overseas migrants and plentiful jobs for highly paid knowledge workers.
Rather than trying to time the next property purchase based on where we are in the cycle, taking a long-term view and getting a foothold in the Sydney property market while others are sitting on the sidelines may be an ideal strategy.
Take a deeper look at the Sydney property market
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Read More: Best Suburbs in Sydney
Melbourne Property Market
The Melbourne property market experienced a very modest increase in the past 12 months and a decline in December 2023, but there are many reasons to be optimistic.
Although Melbourne is experiencing slower growth than other cities, house prices and rents are expected to continue rising through 2024.
Proptrack reported seven Melbourne suburbs even posted average house price gains above $100,000.
However, Melbourne property prices rose a modest 3.5% overall in December 2023.
While homes in Melbourne are selling after 30, compared to 29 days in December 2022, there’s still plenty of buyer activity in the market. Looking ahead, the long-term fundamentals of the Melbourne property market are strong.
With a median house price of $961,000 and a median unit price of $510,000, there’s a window of opportunity to enter the market before it picks up again.
Brisbane Property Market
The Brisbane property market has experienced an impressive double-digit growth over the past 12 months. According to CoreLogic’s Home Value Index, Brisbane’s dwelling values are currently at a record high, even surpassing those of Melbourne!!
The median house price increased by 1% in December 2023. Listings are low across the city, with the total number of listings decreasing by -1.5% in the 12 months to December, suggesting that supply remains pretty tight. Plus, with the 2032 Olympics on the horizon, Brisbane will surely receive a boost in international recognition and investment, along with an influx of highly paid knowledge workers.
While it’s uncertain what the next 6 months will bring, there’s reason to believe that the yearly growth rate will continue to pick up momentum.
With the population of Queensland expected to grow by over 16% by 2032, the long-term fundamentals of the Brisbane property market remain strong.
So, Instead of trying to predict the market cycle, now is a good time to buy property in Brisbane. Don’t wait for others to make a move; take advantage of the current conditions and get ahead of the curve.
Take a deeper look at the Brisbane property market
Ready to learn more about the Brisbane property market?
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Read More: Brisbane Property Market Update
Adelaide Property Market
Despite the uncertainty of the property market, the Adelaide market has remained relatively resilient to price falls. The median house value in Adelaide has increased by an impressive 51% since the start of the pandemic, reaching $926,000in December 2023.
According to NAB, Adelaide is expected to see a 6.2% growth in the next 12 months. This may be good news for homeowners but will add to the affordability pressures. It’s important to remember that the extent of the house value increases remains to be seen, especially as we are waiting to find out if the RBA will cut interest rates this year.
However, there’s still plenty of opportunity to take advantage of the current market conditions. The long-term outlook for Adelaide remains positive. If you’re looking to enter the property market, now may be the perfect time to move and secure a property in one of Australia’s most resilient markets.
Perth Property Market
Perth is defying the odds and emerging as a bright spot in the Australian property market, with dwelling values currently at a record high! Despite the downturn that affected the rest of the country in 2023, the Perth property market showed resilience and remained an attractive investment option for buyers. This saw the median home values of Perth increase by an impressive 15.2% in the year ending December 2023.
With low vacancy rates, rising rents, and relative affordability, Perth is becoming a hotspot for investors from eastern states. According to Westpac, Perth will likely experience moderate growth of 8.0% over the next 12 months, making it an ideal time to invest.
Most property experts are optimistic about Perth’s market and predict continued growth over the next 12 months due to the low level of stock and strong buyer demand.
Perth is a good city to buy property in due to its relative affordability, rising population and flourishing economy.
Hobart Property Market
It’s important to remember that while the Hobart housing market has recently experienced a decline in house prices, it’s not all bad news.
The average sale price of a home in Hobart as of December 2023 is still a solid $845K, which is nothing to sneeze at. Moreover, this price decline presents a great opportunity for savvy investors to enter the market at a lower price point.
If you’re thinking of investing in Hobart, there are certain suburbs that you should definitely consider. West Hobart, North Hobart, and South Hobart are all areas that are still showing strong growth potential despite the broader decline in prices.
By taking a closer look at these areas, you may find some great opportunities to help you build wealth over the long term. So, while the past couple of months have been challenging for Hobart, there are still plenty of opportunities to be found for those who are willing to put in the effort.
Darwin Property Market
Are you looking to invest in property? Darwin could be your answer! While the Darwin property market has experienced a small decrease in median house prices over the past 12 months, in December 2023, house values rose by 0.7%.
It is still considered Australia’s most affordable capital city, with a median dwelling value which is still the same as it was 9 years ago.
Even more encouragingly, the city has been performing well over the past year, with a modest decrease in housing value of just -0.1%. Plus, with median weekly house rents increasing by 3.0% annually, it’s a great time to invest in property in Darwin.
Looking ahead, the outlook for the next 6 months is positive, with the Darwin property market expected to rise, though not as high as the other cities. Darwin has a lot going for it, including a low-density population and a relaxed lifestyle. The city has seen an uptick in interest from investors and homeowners. Therefore, if you’re looking for a smart investment opportunity with positive long-term prospects, Darwin’s property market is definitely worth considering!
Canberra Property Market
House prices increased by a small but encouraging 0.5% over the past year.Moreover, the strong auction clearance rates throughout the year have been another sign of the strength of the Canberra property market.
There are also still government incentives to encourage first-home buyers into the market. While there may be some decline in the short term, the outlook for the next 6 months in the Canberra property market is bright.
BONUS: Will Interest Rates Go Down In 2024
If you are like millions of other Australians out there, you may be wondering whether interest rates will go down this year. There are differing predictions from experts, but here are the predictions from the big four banks:
Commonwealth Bank: Experts are predicting massive interest rate cuts next year starting in September and also in 2025
ANZ bank: ANZ expects rates to remain the same at 4.35% through 2024 but with a single rate cut towards the end of the year.
AMP: AMP is slightly more optimistic, expecting rates to be cut in the middle of the year and reduced to 3.6% by the end of 2024.
NAB: NAB is expecting the rate to not change until late 2024.
BONUS: What Could Cause The Australian Property Market To Crash in 2024?
- Higher household debts. The average household debt level grew by 7.3% in 2023, and it would be worth keeping an eye on these debt levels to ensure that people aren’t getting in over their heads. However, the Australian banking system is heavily regulated. Banks are still required to use a 3% buffer, so if you’re applying for a loan today, the banks will add a 3% buffer from the current rates. So, if the interest rates are 6%, they will assess your loan at 9%.
- Overvalue or oversupply of properties. Realistically, the high value of properties in Australia is due to a limited supply and attractive affordability for investors. The gap between housing supply and demand pushed property prices up in 2023 and could potentially keep pressure on in 2024. But it could take it off if a huge glut of properties suddenly built in a short period and hit the market. But this looks pretty unlikely.
- Massive Global shocks like the Global Financial Crisis or Covid. While the COVID shutdown weakened growth and momentum in the United States and the European Union, it didn’t really have the same impact on our property Market that it did overseas. The risk of a local recession could cause a cascading effect, where if the economies overseas slow down, it could mean less work here, unemployment could increase, and that would affect housing. But also, as we saw during COVID-19, when people let go of their jobs, the banks stepped in and allowed people to have 12-month interest-only periods. So again, while that could happen, it looks pretty unlikely, given the current economic indicators.
Looking To Buy A Property Anywhere In Australia? Here Are Your Next Steps
If you’re looking to buy a property anywhere in Australia, Hunter Galloway has you covered. Our team of experienced brokers can help you navigate the often complex and overwhelming process of buying a home, no matter where you are in the country.
With our help, you can secure the best possible loan for your unique financial situation and take advantage of the current market conditions. Don’t hesitate to take the first step towards your dream home. Call us today at 1300 088 065 or
Unlike other mortgage brokers, who are one-person operations, we have an entire team of experts dedicated to making your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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