Home Price Forecasts Push Up Despite Headwinds

Australian home prices are set to rise by up to 5 per cent in the 2024-25 financial year despite the high interest rates, an increasing volume of stock for sale and falling borrowing capacities.

National home prices have climbed 5.9 per cent year-to-date as home values rose 2.7 per cent between January and May, according to the twice yearly PropTrack Property Market Outlook Report.

The research found that home prices across Brisbane, Sydney and Melbourne will continue to grow 3-6 per cent in the 2025 financial year.

All three cities experienced varying rates of growth, with home values going up 12 per cent, 6 per cent and below 1 per cent, respectively.

Perth is still expected to lead home price growth, albeit at a slower pace, and reach 8-11 per cent growth.

Home prices in Adelaide, which soared close to 13 per cent over the financial year to date, will moderate to rises of 5-8 per cent the next year.

▲ National home prices have jumped 5.9 per cent year-to-date.

 

PropTrack director of economic research Cameron Kusher, who authored the report, said the market was proving to be far more resilient than anticipated.

According to Kusher, the introduction of Stage 3 tax cuts and projected interest rate cuts could further encourage buyer demand even though supply from new home starts and completions were expected to remain low.

“We expect home price growth will be slightly stronger by the end of the 2024-25 financial year than annual growth over the 2024 calendar year, with prices anticipated to rise in the larger markets of Sydney and Melbourne over the next 12 months while slowing in several capital cities,” he said.

“Buyer demand remains strong despite interest rates sitting at 12-year highs, borrowing capacities falling and the volume of stock for sale increasing, leading property prices to rise at a faster rate than expected.”

Volume

The report also found that national sales volumes between January and May this year were almost 14 per cent higher on the year prior, with Sydney and Melbourne posting the largest increases even though the two cities, alongside Canberra, recorded the greatest rise in stock available for sale.

Interest

Enquiries per listing remained at an elevated level but were down 6 per cent compared year-on-year, with the median time for a property listing dropping to 38 days last month from 43 days in May 2023.

Overall, national home prices were up 42 per cent for the period between March 2020 to May 2024.

*This post was originally published on https://www.theurbandeveloper.com/articles/proptrack-2024-property-market-outlook-report