After a few years of skyrocketing prices, Australians can expect things to be a little more slow and steady during the coming year. This is good news if you’re preparing to buy or sell.
We have rounded up some of the final home price statistics for 2023 and investigated some expert forecasts for the year to come.
The year that was
2023 began with experts forecasting a drop in house prices caused by continued interest rate hikes and the ‘fixed rate cliff’.
However, initial predictions were proven wrong, with the market following up an early drop with a rise in national average values. By the end of the year, every capital city except for Hobart and Darwin had shown positive growth, with Perth’s 12.3 per cent increase leading the charge.
The reason for prices defying forecasts comes down to supply and demand. Even though interest rates remained high, stock levels and new building approvals were low, which is pushing prices up. Perth, Adelaide and regional areas saw interest from interstate and capital city investors, while cash buyers in east coast cities helped to keep prices buoyant as well.
There was also an increase in net migration, putting further pressure on housing availability and prices. Meanwhile, the fixed rate cliff never really happened, with major banks saying that late mortgage payments have been tracking below average.
2024 property forecast
After the success of 2023, most property professionals are predicting a steady to strong market in 2024.
Interest rates are still playing a role in forecasts, with some commentators saying that the rise to a 12-year high of 4.35 per cent in November 2023 has put a dampener on buyer demand.
Overall, an average rise of around 4 per cent across the nation is expected.
Capital city property forecasts
This is what experts are predicting for Australia’s capital cities in 2024:
• Sydney: After a strong growth of 8.3 per cent in 2023, Sydney is expected to see a 2 to 5 per cent rise in home values this year.
• Melbourne: Melbourne’s slight increase of 1.9 per cent last year will be matched or slightly increased in 2024 with predictions of a 1 to 4 per cent rise.
• Brisbane: Brisbane was one of the big performers last year with 8.9 per cent growth and looks set to remain a top performer in 2024, with predictions sitting at around a 3 to 6 per cent rise. As Corelogic recently reported, values have risen by more than 50 per cent since the start of the pandemic and the city is now outperforming Melbourne.
• Adelaide: Another big hitter in 2023 with 9.2 per cent growth, Adelaide is expected to be one of the top performers again this year with a rise of 4 to 7 per cent.
• Perth: Perth was the stand-out capital of 2023, with a whopping rise of 12.3 per cent. While not predicted to reach such giddy heights this year, Perth will still be a leader with predictions of a 5 to 8 per cent rise. Investors are particularly interested in areas south of the metropolitan areas, which are tipped for big growth.
• Hobart: Hobart experienced an 18 per cent fall in prices during 2023, with home values settling after the pandemic. Hobart property owners may or may not break even this year, with predictions sitting at -2 to 1 per cent growth.
• Canberra: Canberra is another capital that may or may not see prices climb in 2024. After a slight growth of 1.8 per cent last year, this year’s prediction is a change of between -1 and 2 per cent.
• Darwin: Darwin saw a 2 per cent drop in 2023, and predictions say the market will either stay still or drop by around 3 per cent.
A positive outlook for buyers and sellers
The good news for sellers is that you are unlikely to see the value of your home decrease while you are preparing to sell in 2024. Buyers, on the other hand, will have the benefit of more predictable sale outcomes.
When it comes to property values, it all comes down to your local area results, your location and the home itself. If you’d like an accurate valuation of your existing home and an idea of what it will be worth by the end of the year, reach out to your local Professionals representative today.
