This article is from the Australian Property Journal archive
HOME sales proved resilient over 2024 with an 8% volume increase, before the shifting to a slower modality in the tail end of the year.
According to CoreLogic’s Best of the Best Report for 2024, home sales reach 528,000 in total over the 12 months to November, reflecting not only an uptick from the previous year but a 6% increase on the previous five-year average.
Home values have surged by 5.5% over the same 12-month period, with the combined value of Australian dwellings passing $11 trillion.
Though recent months have seen gains wind down, with the CoreLogic Home Value Index showing only slight increase of 0.1% in November.
“The market’s initial strength in 2024 gradually waned due to declining demand, rising levels of advertised supply, and a shifting outlook for inflation and interest rates,” said Eliza Owen, head of research at CoreLogic.
“Beyond the market conditions, the key theme throughout the year was one of variability.”
Reflecting this diversity, while Perth saw a major value increase over the year of 21.0%, Melbourne swung in the other director with a 2.3% decline in value.
Like their metropolitan counterparts, regional Victoria and regional WA demonstrated the highs and lows of annual value changes with a 2.7% decline and 15.5% increase respectively.
“However, even in high growth markets of Adelaide, Brisbane and Perth, there are distinct signs of a cyclical slowdown, with the quarterly pace of gains easing over the course of the year,” added Owen.
“Interestingly, the quarterly value decline across weaker capital city performers has shown marginal signs of easing toward the end of 2024. This could signal some stabilising of values in weaker markets through 2025, and a narrowing of the range in capital growth over the next 12 months.”
Buyers are looking to the most affordable segments of the housing market, with the bottom quartile of national market values seeing a 10.3% increase in the 12 months to November.
This compared to 7.2% growth in the middle of the market and just 3.0% of growth in the upper quartile of home values.
This is reflected in the top growth house markets for the year, all of which were located in Perth, with half of the suburbs boasting an affordable median house value below $661,000.
For the unit market, the top growth markets were more spread out, with Perth, Brisbane and Adelaide represented and each suburb with a median unit value below $600,000.
For houses, Beachlands, WA saw the greatest change in value at 38.4%, while for units, Dolphin Heads, QLD took the top spot at 52.8% growth.
This trend is unsurprising considering the high cash rate holding at 4.35% and the stretched limits of affordability for the majority of Australian buyers.
Top 10 most affordable locations for houses for capital cities was led by Darwin, which saw six suburbs make the ranking, with Brisbane represented by two and both Hobart and the ACT with one each.
For houses Moulden, NT was the most affordable suburb with a median of $392,008, with Bakewell, NT the most affordable for units with a $278,855 median.
Including the regions, Norseman, WA was the affordable house market with a median value of just $80,289, while for units Laguna Quays, QLD came in at number one with a median value of $142,689
NSW dominated the top sales results for the year, with both Victoria and Queensland getting one transaction into the top 10.
Over the year to November, Point Piper’s 142 Wolseley Road remains the top sale for the year, pulling in $51.5 million back in March.
In the rental market, values were up 5.3% in the year to November, a more marginal increase than last year’s 8.1% and the year to September 2022’s 9.6% increase.
Noosa Heads, QLD houses saw the greatest rent growth over the period at 23.7%, with Geraldton, WA topping the list for unit rent growth at 21.5%.
Owen noted that 2025 is likely to start with a similarly slowed market, with buyer demand remaining strained, leading to a minor decline in nation home values.
“A change in the official cash rate target could then mark an inflection point, increasing demand in the second half of the year,” added Owen.
This as the economists are forecasting a later and shallower rate cut from the RBA in 2025.
“Real household income has been boosted by the Stage 3 tax cuts, despite this boost to income seemingly being saved by households for now. Real household income growth is expected to pick up further as inflation continues to ease in 2025,” said Owen.
“While market conditions are broadly expected to improve off the back of a cash rate reduction in 2025, there will still be considerable diversity in housing market performance.”
