Although housing prices continued to rise across much of the country, the rate of growth has moderated.
Factors like worsening affordability, higher interest rates, and an influx of properties hitting the market have collectively tempered price increases.
At the same time, the rental market is beginning to ease, though some challenges persist.
Key Highlights of Australia’s Property Market in 2024:
- Steady Price Growth with a Slowdown in H2:
– Property prices rose every month despite high interest rates.
– Growth decelerated in the second half due to affordability pressures and increased housing supply. - Strong Demand Drivers:
– Net overseas migration and shrinking household sizes kept housing demand elevated.
– A resilient job market and wage growth bolstered buyer confidence. - Housing Supply Constraints:
– Housing completions per capita remained low, impacted by labour shortages and rising construction costs.
– Project delays and cutbacks from 2021-22 worsened the housing undersupply. - Uptick in Dwelling Approvals:
– October saw a 6.1% year-on-year increase in approvals – the highest in two years.
– High build costs and supply chain disruptions persist, but government fast-tracking initiatives are starting to make an impact. - Rental Market Developments:
– Rental price growth slowed, with slight improvements in vacancy rates as investor activity picked up.
– Affordability remains a pressing issue, especially in Sydney and Melbourne. - Investor Contributions:
– Increased investor participation added vital rental stock, though vacancies remain tight. - Spring Surge in Listings:
– A rise in spring listings expanded buyer options, tempering price growth.
– Despite this, prices in many cities are still at record highs. - Sales and Market Activity:
– Year-to-date sales volumes were 9.3% higher than 2023 but showed signs of slowing towards year-end. - Economic Outlook:
– Inflation is trending lower, but interest rate cuts are not anticipated until mid-2025.
– Potential rate reductions in late 2025 could reignite buyer confidence and drive renewed price growth.
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