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The Australian property market navigated a turbulent year in 2024, with rising costs, interest rate stagnation, and uneven performances defining the landscape, according to the December 2024 Month in Review by Herron Todd White.
While cities like Brisbane and Perth recorded significant gains, other areas such as Melbourne and Sydney faced somber growth, reflecting the challenges of a post-pandemic adjustment.
After years of rapid growth, Australia’s industrial property market entered a stabilisation phase. Rising vacancy rates in major hubs, including Sydney (3.75%), Melbourne (3.1%), and Brisbane (3.4%), signalled a shift toward tenant-friendly conditions. Increased construction costs and planning delays compounded the challenges, limiting new developments in key precincts.
Despite the slowdown, prime industrial properties continued to attract investors.
“Prime industrial yields have also stabilised more quickly than other sectors, indicating pricing adjustment has likely completed,” Herron Todd White director Nick Michael said.
Perth maintained its reputation for resilience, with sustained demand for high-specification facilities even as land shortages drove prices higher.
The residential market mirrored broader economic uncertainty, with buyers holding off as expected interest rate cuts failed to materialise. The Reserve Bank of Australia (RBA) maintained the cash rate at 4.35% throughout 2024, deferring anticipated reductions to late 2025. This decision cooled buyer activity, with auction clearance rates declining and many properties passed in.
Sydney and Melbourne experienced price stagnation, particularly in secondary markets. In contrast, regional hubs like Perth saw a remarkable 21% increase in median house values due to strong local demand. Meanwhile, the rental market stabilised after a wave of post-pandemic migration, with growth in rental prices easing and vacancy rates holding steady.
The high-end property market saw reduced activity in 2024, with fewer landmark sales compared to previous years. Nonetheless, the sector delivered standout deals, including a $51.5 million sale at Point Piper and a $30 million unit in Darlinghurst.
At the same time, premium properties in Melbourne faced challenges, with some price points softening as inflation and borrowing costs weighed on buyer sentiment. Developers in Sydney’s Northern Beaches and North Shore also pulled back as construction costs and oversupply tempered demand for new builds.
