The Australian housing market is cooling as 2024 ends, with the median price at $898,745—up 7.7% annually but slowing to 0.4% monthly growth, Ray White reported.
Nerida Conisbee (pictured above), chief economist at Ray White, attributed this moderation to both seasonal trends and broader economic challenges.
“This deceleration in price growth reflects both seasonal patterns and broader economic headwinds,” Conisbee said. “Will this lead to an actual fall in prices? For some cities perhaps, particularly Melbourne. For others such as Perth, Brisbane and Adelaide, it is likely to slow things down.”
While financial markets anticipate two interest rate cuts in late 2025, their implementation will depend on inflation trends and global economic factors. External influences, such as US policy changes, could significantly shape the Reserve Bank’s (RBA) decisions.
Australian capital cities are experiencing varied market dynamics. Perth remains a standout, with annual growth at 20.9% and a 0.7% rise in November alone.
In contrast, Sydney's annual growth is now at 5.2%, with no change in monthly performance.
Melbourne shows the sharpest slowdown among major cities, with just 0.8% annual growth, signaling a potential shift in demand, Ray White reported.
Regional areas continue to outshine their urban counterparts, particularly in Western Australia, where house prices have jumped 16.1% over the past year.
Regional South Australia (14.4%) and Queensland (12.3%) have also seen robust gains, reflecting long-term shifts in buyer preferences.
Higher supply in major cities like Sydney and Melbourne is tempering price growth. As more properties hit the market, affordability pressures and buyer fatigue are becoming more evident in these areas.
Looking ahead, several factors will shape the housing market in 2025.
Population growth is expected to sustain demand, while high construction costs will likely constrain new supply. The anticipated easing of monetary policy could improve borrowing capacity, though the benefits may vary between markets.
While prices are projected to grow through 2025, the pace will likely slow further as buyers and sellers adapt to evolving economic conditions and changing interest rate expectations.
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