Shaun Thomas (pictured above), director of Herron Todd White, recently provided an overview of how various residential markets across Australia have performed in the first six months of 2024.
Interest rates have been the main driver in most markets this year.
Initial forecasts predicted rate cuts by June, spurring optimism and activity, but stubborn inflation has pushed estimates for a rate cut back to 2025, with a possible increase in the near future.
“Many economists are now forecasting the cut won’t come until 2025, and there’s even a chance of a cash rate increase in the next few months,” Thomas said.
This uncertainty has caused major markets like Sydney and Melbourne to flatline or decline as winter sets in.
In contrast, Brisbane, Adelaide, and Perth continue to perform strongly, with all on track for double-digit annual growth. Perth has already achieved this milestone in the first half of the year.
“Brisbane now has a higher median dwelling value than both Melbourne and Canberra, showing the continued strength in that market post the pandemic,” Thomas said.
Median values in regional areas generally align with their state capitals, except for regional Tasmania, which is outperforming Hobart, and regional Western Australia, which is slightly behind Perth.
A lack of new dwelling supply, driven by increased immigration and smaller household sizes, continues to underpin many residential markets.
Despite government efforts to boost new housing supply, challenges persist.
“New building approvals continue to lag, and an increasing number of projects are becoming unfeasible due to the cost of materials, shortage of skilled labour, increasing developer levies, and the cost and time involved in getting projects approved,” Thomas said.
As a result, property values remain stable or are increasing despite high interest rates and cost-of-living pressures.
Rental vacancy rates are at historic lows, leading to strong growth in asking rents across nearly all capital cities.
To read HTW’s Month in Review report for June, click here.
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