In Herron Todd White’s Month in Review for December 2024, Kevin Brogan (pictured above), national director, reflects on the energetic start to the residential property market post-summer.
With mortgage security valuation volumes increasing by approximately 20% in metropolitan areas and nearly 10% in regional sectors, the market hinted at optimism regarding future rate cuts.
“Buyers seemed eager to close deals before any rate reductions could potentially hike prices,” Brogan said.
Initially, the market buzzed with activity under the assumption that the Reserve Bank (RBA) would reduce rates. However, persistent inflation shifted expectations, maintaining higher interest rates.
This adjustment has varied impacts across states, Herron Todd White reported, with Western Australia, South Australia, and Queensland seeing sustained market activity and price increases, whereas New South Wales, the Australian Capital Territory, and Tasmania experienced slower dynamics. Victoria and the Northern Territory even observed price declines.
RBA has maintained the cash rate at 4.35% for over a year, with any potential rate cuts now anticipated no earlier than the second half of 2025.
This prolonged period of rate stability is increasingly influencing buyer sentiment, causing even the most robust markets, like Western Australia, to show signs of slowing.
“The spring selling season of 2024 brought an uptick in listings, yet buyer activity has cooled,” Brogan said.
The auction scene revealed telling trends, with rising listings yet diminishing clearance rates, signaling a cautious buyer approach, Herron Todd White reported.
This shift is accompanied by an interesting twist in median dwelling prices – Adelaide has surpassed Melbourne, largely due to Melbourne's higher proportion of units affecting overall median prices.
The rental market saw a significant rise in rents following a surge in post-COVID migration. However, this trend decelerated in 2024 as migration returned to more typical levels.
Despite more modest rent increases this year, the vacancy rate remains low, between one and two percent, suggesting continued tight market conditions.
The residential market may experience a sluggish start this 2025.
“The initial weeks of the New Year always take a bit to ramp up, and the recent softening in auction clearance rates indicates buyers' hesitation,” Brogan said.
The Herron Todd White leader anticipates the new year will stir fresh discussions and provide ample material for market analysis.
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