PHOTO: 9NEWS
Australian Housing Market: Record Growth and Emerging Slowdown
Home prices across Australia’s combined capitals continued to rise over the final quarter of 2024, marking the eighth consecutive quarter of growth for houses and the seventh for units, with prices reaching record highs. This represents the longest period of uninterrupted quarterly growth since 2012-15. Brisbane, Adelaide, and Perth ended 2024 with record-high house and unit prices, along with Sydney units. Despite relentless cost-of-living pressures and a higher-than-anticipated cash rate, the housing market has shown remarkable adaptability and strength. The standout performers of 2024 were our more affordable capital cities and the unit sector in some areas. For houses, Perth led the gains with a 19.5% increase, followed by Adelaide (14.6%) and Brisbane (10.9%). For units, Perth saw a 28.2% rise, followed by Brisbane (18.1%) and Adelaide (13.6%).
While there was a slight reacceleration in price growth during the December quarter compared to the previous quarter, a broader slowdown remains evident. Quarterly growth for house prices in the combined capitals has more than halved compared to the same quarter the previous year, while unit growth slowed by about a quarter. This signals the weakest December quarter performance for the combined capitals in two years.
The housing market is now entering a rapid slowdown or decline across all capital cities as affordability challenges, mounting cost-of-living pressures, and limited borrowing capacity take their toll. The market is finally catching up with the financial strain many buyers are experiencing, reflecting a shift in conditions that can no longer be overlooked. All capital cities are now in decline, stable or experiencing a rapid slowdown in growth. They are all past their peak quarterly and annual growth rates, as evidenced by the weakest outcome for a December quarter since 2022 for houses in Sydney, Brisbane, and Adelaide, and for units in Sydney, Brisbane, Perth, and Hobart. It was the weakest outcome since 2019 for Perth houses and since 2020 for Adelaide units.
The slowdown is largely due to affordability pressures, with rising prices making it harder for many buyers to keep up. Wages haven’t kept pace with home prices, and the ongoing cost-of-living squeeze is only adding to the challenge. Many potential buyers are holding off, hoping for a cash rate cut to boost their borrowing power. As demand wanes, supply has been steadily rising. 2024 ended with the highest number of homes for sale for the month of December across the combined capitals in three years, with Sydney seeing a six-year high. This growing choice is contributing to softer clearance rates, properties staying on the market longer, and more price negotiations – clear signs that the market is shifting to favor buyers. The autumn selling season will bring opportunities for buyers.
House and Unit Prices by Capital City
| Capital City | Dec-24 | Sep-24 | Dec-23 | QoQ | YoY |
|---|---|---|---|---|---|
| Sydney | $1,645,444 | $1,646,790 | $1,593,723 | -0.1% | +3.2% |
| Melbourne | $1,039,460 | $1,023,548 | $1,050,314 | +1.6% | -1.0% |
| Brisbane | $1,016,192 | $993,107 | $916,484 | +2.3% | +10.9% |
| Adelaide | $992,193 | $967,618 | $865,816 | +2.5% | +14.6% |
| Canberra | $1,065,187 | $1,065,187 | $1,040,247 | 0.0% | +2.4% |
| Perth | $913,011 | $898,477 | $764,185 | +1.6% | +19.5% |
| Hobart | $712,851 | $681,289 | $700,646 | +4.6% | +1.7% |
| Darwin | $651,771 | $633,149 | $623,728 | +2.9% | +4.5% |
| Combined Capitals | $1,165,345 | $1,152,250 | $1,102,174 | +1.1% | +5.7% |
| Combined Regionals | $645,706 | $621,887 | $597,071 | +3.8% | +8.1% |
SOURCE: DOMAIN