PHOTO: Dr Nicola Powell is Chief of Research and Economics for Domain
According to a recent report by Domain, house prices in Sydney, Adelaide, and Perth are expected to reach record highs in the fiscal year 2024 if the forecasts hold true.
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Domain, a leading property marketplace, has released its Forecast Report for the 2023-24 financial year, providing insights into the Australian housing market for the next 12 months. The report includes projected price changes for both houses and units in major cities and regional areas.
The report indicates that Australia’s housing market is poised for a gradual recovery in the upcoming financial year, with certain capital cities expected to fully rebound from the downturn experienced in 2022.
If Domain’s price forecasts materialize, house prices in Sydney, Adelaide, and Perth will soar to unprecedented levels. Additionally, unit prices in Brisbane, Adelaide, and Hobart are also anticipated to reach new record highs.
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Record price highs are projected as follows:
Sydney: Domain’s analysis, incorporating economic factors, real-time behavioral data, and property statistics, predicts a growth of 6 to 9 percent in house prices by the end of FY24. This would set a new record high, with a median price range between $1.62 million and $1.66 million, surpassing the previous peak of $1.59 million in March 2022. The report emphasizes that the recovery will be gradual, taking about six quarters of growth to recover from the price declines witnessed over three consecutive quarters during the 2022 downturn.
Adelaide: House prices in Adelaide are expected to reach a new record high with a growth forecast of 2 to 5 percent. The median house price is projected to fall between $873,000 and $861,000, showcasing continued strength in the market. Adelaide managed to avoid a price downturn during 2022 and early 2023, in contrast to more expensive capital cities such as Sydney, Canberra, and Brisbane. If the forecast holds, Adelaide is expected to experience a period of subdued growth compared to the previous boom years, rather than any significant price decline.
Perth: Domain predicts that house prices in Perth will also hit a new record high by the end of the next financial year, with a growth forecast of 1 to 3 percent.
House prices are expected to outpace unit prices in the combined capital cities, with a projected growth of 2 to 4 percent for houses and 1 to 3 percent for units. Melbourne is predicted to see up to 2 percent growth in house prices, Brisbane 1 to 4 percent, Hobart 3 to 5 percent, and Canberra 2 to 4 percent. Unit prices across the combined capitals are forecasted to grow by 1 to 2 percent, reaching a new record high in Brisbane and Adelaide, and coming close to a new high in Hobart. However, unit prices in Canberra may experience volatility, including price declines, before recovering.
The report also suggests a slowdown in regional areas after the COVID-19 pandemic, as growth rates are expected to align more closely with historical trends. While there was significant growth in regional areas during the pandemic due to lifestyle preferences and demographic shifts, the focus is predicted to shift back to the combined capitals, led by Sydney. The forecast indicates a slower pace of growth in combined regional house and unit prices, with a predicted rise of 1 to 3 percent for houses and 0 to 2 percent for units in the next financial year. Regional NSW may see a decline of 1 percent to positive growth of 1 percent in house prices, while unit prices are projected to grow by 1 to 3 percent. Regional Queensland and the Gold Coast are expected to experience house price growth of 3 to 4 percent and 2 to 4 percent, respectively.
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