2024 Australian Property Market Predictions: As another unpredictable year in Australian real estate draws to a close, savvy investors turn their sights to the future. What lies in store for residential property in 2024? Will the rollercoaster ride of soaring highs and stomach-churning lows continue to whip buyers and homeowners alike? Or will the market settle into a state of stable growth?
We’ve analysed the critical factors every property player should have on their radar before entering the 2024 arena. Read on for the comprehensive outlook of the 2024 Australian Property Market Predictions.
2024 Australian Property Price Predictions
The past several years delivered red-hot growth to Australian capital city markets, culminating in a peak circa March 2022 before a gradual cooling phase took hold.
What trajectory will prices follow as we enter 2024 and beyond? Here are the key price drivers to watch:
Interest Rates
As the RBA continues responding to evolving economic pressures, all eyes fixate on the movement of the cash rate. Consensus suggests we’ll see at least two more 25 basis point hikes before RBA pauses to reassess, likely settling around 3.35% by early 2024.
This will impact mortgage affordability and borrowing capacity, slowing down market activity. However, compared to previous decades, current rates remain accommodative to fuel steady if not spectacular growth.
Unemployment Rates
Australia continues to log impressively low unemployment, projected to hover between 3.5-4% through 2024. Job security buoys confidence to take out big mortgages required in major capitals, keeping the rate of sale brisk.
Tight rental markets will also compel more renters to purchase to escape relentless increases, further supporting demand.
Inflation
As rising costs of living place household budgets under pressure, discretionary spending pulls back. However, intense housing shortages mean fundamental demand remains strong enough to withstand economic headwinds.
Inflation is projected to ease over 2023. And higher density approvals suggest supply pipeline constraints slowly easing.
Consumer Sentiment
Buyer anxiety and eroded confidence defined the end of 2022. However, optimism gradually returns heading into 2024 as financial uncertainty stabilizes.
Eager first home buyers priced out of recent frenzy re-emerge to quench property dreams, though FOMO psychology stays muted.
The Verdict for 2024: Steady as she goes! Expect modest single-digit growth rather than breakneck gains, with buyers regaining leverage to secure discounts as the market normalises from the red-hot 2021/early 2022 peak.
2024 Regional vs Capital City Outlook
Pandemic-driven demand saw many Australians depart major metro hubs in pursuit of cheaper property, space and sea change. Will the trend continue as we enter 2024?
The regional boom captured headlines in 2022. However, the tide shows signs of turning back towards capital cities, as hybrid work models bring displaced Aussies back toward CBD offices 2-3 days per week.
Capital cities also boast stronger immigration intake over coming years as Australia’s border relaxation unleashes repressed international demand, benefiting attached apartment rents and prices.
Meanwhile, regions face risks of oversupply after explosively accelerated construction, with vacancies already rising in many satellite towns.
We’ll see a balancing force re-emerge; while still commanding premium, expect capitals to outstrip regional growth through 2024.
Predictions by Major City Markets
How will the various capital city markets fare amid evolving economic currents? Here’s my drill-down by location with median house price predictions.
- Sydney
Sydney housing values fell approximately -5% since peaking in January 2022. But as rents show no signs of softening, yields will lure investors back to Australia’s biggest market in 2024, arresting any further declines.
2024 Prediction: -2% to +2% growth from end 2022 valuations
2024 Median Price Prediction: $1.2M
- Melbourne
Pandemic poster child Melbourne witnessed soaring rents push vacancies to record lows below 1% towards the end of 2022. Population growth to drive continued rental demand with house prices bouncing back.
2024 Prediction: +3% to +6% growth from end 2022 valuations
2024 Median Price Prediction: $970K
- Brisbane
Similar dynamics to southern states, though Brisbane holds allure for interstate migrants given its affordability advantage relative to Sydney and Melbourne. Investment cashflow potential still entices.
2024 Prediction: +4% to +8% growth from end 2022 valuations
2024 Median Price Prediction: $750K
- Perth
The resources sector and population growth inject new vigour into the sleepy Perth market. However, investors remain cautious of previous false dawns, limiting upside potential. Steady incremental gains are on the cards.
2024 Prediction: +2% to +6% growth from end 2022 valuations
2024 Median Price Prediction: $580K
- Adelaide
Adelaide’s affordable prices and idyllic lifestyle lured tree-changers amid COVID. The city is set to cool yet holds appeal for value hunters compared to eastern states.
2024 Prediction: -2% to +3% growth from end 2022 valuations
2024 Median Price Prediction: $640K
- Canberra
Government stimulus and inflation-resistant public service jobs shield Canberra’s economy near-term. But market tailwinds rely on sustained migration. Price forecast: continued incremental climb.
2024 Prediction: +3% to +7% growth from end 2022 valuations
2024 Median Price Prediction: $1.1M
Major Factors That Could Disrupt 2024 Predictions
Forecasting remains part art, part science. Though the above envisions the most likely outcome given current understanding, major outliers could radically alter the trajectory.
Here are key variables to monitor for early signals supportive data may need revising:
- Australian unemployment spikes above -5.5%
- Interest rates exceed -4% cash rate
- Significant new property development stock enters the market
- Global recession impacts local business and consumer confidence
- Changes to taxation policies or buyer incentives
Wrapping Up the 2024 2024 Australian Property Market Predictions Outlook
Savvy investors follow markets through peaks, troughs and stabilisation. The analysis suggests we’re entering a period of balance following blockbuster gains, as pricing catches breath in line with economic realities.
But Australia’s structural undersupply means property retains inherent value, with market disruption primarily impacting speculative activity.
Cashed-up buyers and canny investors will continue securing bricks and mortar assets affordable to their budget in areas underpinned by socioeconomic necessity.
The wild years follow all booms; through steadfast strategy, the Australian dream of home ownership remains viable for life’s battlers and shrewd players alike.
