2024 proved to be a year full of surprises in the Australian property market. Uncertainty around interest rates, inflation, and market dynamics left many expert predictions far off the mark.
Nicola Powell (pictured above), Domain’s chief of research and economics, summed it up:
“I think the fact that so many people got it wrong showcases the complexity of our economy, both locally and globally. But I think we are ending the year feeling a lot more secure after so much apprehension and confusion, which is one good thing.”
Here’s a look at five predictions that didn’t pan out, according to Domain.
Following 12 rapid rate hikes in 2023, many believed 2024 would bring relief for mortgage holders with rate cuts. However, the cash rate remained at 4.35% throughout the year.
“But the early optimism about rates coming down in 2024 influenced so many people’s decisions about buying property,” Powell said.
This prolonged high interest rate made homes less affordable and added uncertainty to the market, pushing predictions for cuts into late 2025.
Despite measures to curb inflation, persistent cost pressures kept it elevated longer than anticipated. Rising wages, energy costs, and lingering supply chain issues contributed to the challenge.
By mid-2024, inflation began to ease, with the consumer price index rising 2.8% in the September quarter – finally within the Reserve Bank’s target range.
Melbourne’s property market was expected to bounce back, but instead, it weakened further.
Median house prices dropped 6.3% below their peak, while units fell 4.8%.
High interest rates, a surplus of apartments, and changes to Victoria’s land tax weighed heavily on the city’s performance.
However, for buyers, the softer market presents better opportunities.
The feared “mortgage cliff,” where fixed-rate borrowers would struggle with rising repayments, turned out to be less catastrophic than expected.
Reserve Bank economist Benjamin Ung noted that fixed-rate rollovers were staggered, giving borrowers more time to adjust, reducing distressed sales.
Contrary to expectations, these markets thrived in 2024. Perth led with a 25.3% annual price increase, followed by Adelaide at 16.9% and Brisbane at 14.8%.
“This shift not only diversified the national property landscape, but also highlighted changing buyer preferences,” Powell said, noting the appeal of affordability, lifestyle changes, and strong local economies.
2024 reinforced the unpredictability of the Australian property market. As 2025 approaches, factors like potential interest rate cuts, inflation trends, and regional growth will shape the next chapter of the market’s evolution, Domain reported.
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