National property prices are forecasted to increase between 1% and 4% in the upcoming year, according to REA Group, which has released the PropTrack Property Market Outlook Report December 2023.
The bi-annual report, which combined an analysis of the residential property market with an outlook for the year ahead, found that the current rebounding in home prices was likely to continue in 2024.
“Australia’s property market proved resilient in 2023. Home prices have increased 5.5% so far this year to a record high, despite deteriorating housing affordability and interest rate rises significantly reducing borrowing capacities,” said Cameron Kusher (pictured), PropTrack director of economic research and report author.
“Nationally, we expect prices to grow between 1% and 4% in 2024. We expect that a combination of continued strong demand and limited new housing construction will contribute to price gains, albeit at a slower pace than what we experienced this year,” he said.
Kusher further said that stage three tax cuts will begin in July, which will be beneficial for higher income earners and may lead to an increase in higher priced housing demand.
“Interest rates are now at a 12-year high, and while they remained steady in December, there is a possibility of future increases, which could have an impact on buyer and seller sentiment,” said Kusher.
Considering the current market momentum and predictions regarding housing supply, interest rates, and impact of rate rises, prices in Sydney and Melbourne are expected to rise but at a slower pace than what was seen in 2023.
Perth, Adelaide, and Brisbane are most likely to lead the increase in home prices across the country following their consistent gains in 2023. Smaller capital cities such as Canberra, Hobart, and Darwin may see slight declines or moderate gains over the year.
“Reflecting on 2023, a number of factors drove the home price rebound. The volume of stock available for sale remained at persistently low levels while buyer demand also increased significantly, fuelled by a housing shortage and strong population growth. It’s likely these trends will continue into 2024,” said Kusher.
