Property Market Update – October 2024

We would like to provide you with an update on recent property market developments that may interest you.

Property Market update as of October 2024 

Our Housing Market

Australian house prices are forecast to rise by approximately 5% nationally in the current financial year, driven by strong underlying demand due to population growth. However, the pace of price increases has begun to slow, down from 8% in the previous year. Affordability constraints and high borrowing costs are cooling the market, with prices increasing by just 1% nationally in the September quarter, according to CoreLogic data.

Economists expect a continued deceleration in growth over the next 12 months. Maree Kilroy of Oxford Economics predicts a 4% national increase in house prices, with growth driven mainly by lower-priced properties and mid-tier cities. Analysts’ projections range from 2% to 7.5%, with buyers leaning toward more affordable options amid affordability pressures.

AMP’s Shane Oliver echoes this view, expecting national house prices to rise by 5% but warns that prolonged high rates and rising unemployment could dampen growth. The hottest markets, such as Brisbane, Perth, and Adelaide, may see price gains moderate, but interstate migration continues to support these areas. Sydney and Melbourne, on the other hand, are already showing signs of cooling, with Sydney prices up only 0.2% in September and Melbourne down 1.1%.

• Perth: House prices surged 23.6% last financial year and are expected to increase by 8-10% in FY24. Median prices in Perth are forecast to reach $800,000 by the year-end.
• Brisbane: After a 15.8% rise last year, Brisbane’s market remains strong, with interstate migration fuelling demand. House prices are forecast to approach $1 million.
• Sydney & Melbourne: Conditions are softer, with Sydney’s growth expected to reach 4% by year’s end, while Melbourne may see modest gains of 0.8%, at risk of slight declines according to some analysts.

Outlook As interest rate cuts are anticipated in the future, borrowing capacity may improve, potentially boosting the market again. However, in the near term, affordability pressures, high borrowing costs, and rising unemployment may limit significant price growth across major cities.

Sydney

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	1,937,630	10.870	1.8%	3.5%
All Units	839,481	3.518	1.9%	8.1%
Combined	1,492,978	7.893	1.8%	4.2%

 

Melbourne

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	1,248,169	4.840	1.0%	4.6%
All Units	612,068	-0.168	0.6%	3.4%
Combined	1,048,432	3.267	0.9%	4.1%

Brisbane

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	1,175,371	-3.034	-0.3%	17.3%
All Units	663,839	1.011	2.2%	22.6%
Combined	1,047,538	-2.023	0.1%	18.0%

Perth

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	1,065,651	-4.678	-0.9%	24.1%
All Units	569,253	4.547	1.3%	26.4%
Combined	936,092	-2.270	-0.6%	24.3%

Adelaide

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	962,455	6.645	0.3%	20.3%
All Units	465,043	0.157	-1.3%	7.6%
Combined	873,131	5.480	0.1%	19.0%

Canberra

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	1,172,363	5.249	1.5%	5.5%
All Units	597,916	1.196	0.8%	-0.8%
Combined	961,584	3.762	1.3%	3.6%

Darwin

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	677,197	7.091	1.4%	-1.9%
All Units	385,444	0.889	0.5%	1.6%
Combined	562,678	4.657	1.2%	-1.0%

Hobart

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	807,371	6.719	4.1%	1.0%
All Units	477,767	-4.949	-2.6%	-5.7%
Combined	757,513	4.954	3.4%	0.3%

National

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	951,933	7.761	1.7%	8.7%
All Units	563,543	-1.490	0.5%	8.6%
Combined	868,456	5.773	1.5%	8.6%

Cap City Average

Property Type	Price ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	1,405,766	9.571	1.2%	8.1%
All Units	707,794	-0.478	1.1%	9.3%
Combined	1,199,406	6.600	1.2%	8.1%

Our Rental Market

The Australian rental market is showing signs of slowing, with rent growth stagnating for the first time in four years. The latest data from CoreLogic reveals a national rent increase of just 0.1% in the 12 months leading up to July, a sharp contrast to the nearly 40% peak growth experienced in recent years. This is the first significant positive shift for renters since 2020, as soaring demand had driven rents to record highs.

Cooling Rental Market CoreLogic’s executive research director, Tim Lawless, suggests that while rent prices are still rising, the pace of growth has notably slowed. “Two years ago, national rents were rising at 9.5% annually. This has slowed to 7.8% in the past 12 months and is now at 0.1% on a monthly basis,” Lawless said. This marks the smallest increase since the early months of the pandemic in August 2020.

Experts such as Michael Fotheringham from the Australian Housing and Urban Research Institute agree that while rents aren’t decreasing, the slower growth signals the market may be stabilising. “This is a positive sign for renters, suggesting a shift towards more stability,” Fotheringham noted.

National and Regional Trends National rent growth is still up 7.8% annually, down from a peak of 8.6% earlier this year. While metropolitan markets like Sydney and Melbourne are seeing a deceleration, regional areas remain under significant pressure. Many regional communities continue to face rising rents, especially where incomes are lower than in major capitals.

Regions such as Queensland and parts of Tasmania are particularly affected by rising costs. Fotheringham highlighted that “regional rental prices continue to climb, and the disparity between urban and regional affordability remains a growing issue.”

Factors Behind the Slowdown The primary factor driving the rental slowdown is a notable increase in supply, as post-pandemic construction ramps up and more rental properties become available. Peter Koulizos from the University of Adelaide’s Centre for Housing Research explains that, “The supply of new rental property has increased, helping to ease the extreme demand pressure seen during COVID.”

Additionally, slower overseas migration and the increasing trend of shared housing have reduced rental demand. Lawless believes that as affordability pressures mount, more renters are consolidating households to spread costs.

Challenges Ahead Despite the cooling trend, representatives from the Reserve Bank of Australia (RBA) are cautious, with Assistant Governor Sarah Hunter stating that renters may still face pressure as annual lease renewals catch up with market rates. “It’s going to take time for new supply to make a real impact on rental affordability,” she said, emphasising the slow nature of building new housing stock.

While major capital cities are seeing some relief, the regions continue to grapple with high prices and stretched rental affordability, making it a growing concern for Australia’s regional communities. As Dr. Fotheringham pointed out, “The market might have reached its peak—there’s only so far renters can stretch.”

Outlook As supply continues to increase and migration normalises, the rental market is expected to gradually ease further, providing welcome relief for tenants. However, the imbalance between supply and demand, especially in regional areas, suggests that while prices may stabilise in cities, the struggle is far from over for many rural and regional renters.

Sydney

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$1,044.35	-1.35	0.5%	4.4%
All Units	$694.08	-2.08	-0.2%	2.6%
Combined	$836.22	-1.79	0.1%	3.5%

Melbourne

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$737.14	-3.14	-1.0%	5.0%
All Units	$545.97	-1.97	-1.5%	4.9%
Combined	$625.00	-2.46	-1.3%	5.0%

 

 

Brisbane

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$731.12	-3.12	0.7%	4.1%
All Units	$580.43	1.57	1.5%	6.1%
Combined	$663.28	-1.01	1.0%	4.9%

Perth

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$789.42	-4.42	0.2%	8.4%
All Units	$621.05	0.95	1.5%	14.0%
Combined	$719.33	-2.19	0.7%	10.4%

Adelaide

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$652.85	-3.85	-0.6%	9.7%
All Units	$499.42	-5.42	-2.2%	13.5%
Combined	$600.38	-4.39	-1.0%	10.8%

Canberra

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$752.51	12.49	-1.0%	3.2%
All Units	$556.84	-0.84	-0.1%	-0.4%
Combined	$646.01	5.24	-0.6%	1.4%

Darwin

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$713.37	-27.37	-7.3%	-4.9%
All Units	$494.63	30.37	-1.9%	4.3%
Combined	$583.38	6.94	-4.7%	-0.4%

Hobart

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$537.42	0.58	0.9%	4.9%
All Units	$460.10	6.90	1.9%	2.4%
Combined	$506.42	3.11	1.2%	4.0%

National

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$702.00	1.00	0.1%	6.2%
All Units	$547.00	-6.00	-0.4%	5.8%
Combined	$630.03	-2.25	-0.1%	6.1%

Cap City Average

Property Type	Rent ($)	Weekly Change	Monthly Change (%)	Annual Change (%)
All Houses	$831.00	-5.00	-0.8%	4.5%
All Units	$619.00	-2.00	-0.5%	4.4%
Combined	$718.13	-3.40	-0.7%	4.5%

Clearance Rates

Sydney’s property market experienced its weakest auction results in nearly two years, with three out of five homes failing to sell over the past week. The clearance rate, predicted to finalise at around 40%, is a significant drop from CoreLogic’s preliminary figure of 70.5%, indicating worsening conditions for vendors.

Louis Christopher, founder of SQM Research, attributed the low clearance rate to the reluctance of agents to report weak results, signalling caution. “We’re confident the final Sydney clearance rate will be about 40 per cent,” Christopher said after reviewing data from 1005 auctions.

This result follows a similar trend in Melbourne, where clearance rates initially slumped but rebounded after vendors lowered asking prices. Melbourne’s clearance rate rose to 69.2%, the highest in six weeks. However, house prices in Melbourne have fallen by 1.1% over the past three months, making it more attractive to first-home buyers.

Despite tough market conditions in Sydney, some properties still performed well, such as a one-bedroom apartment in Coogee, which sold for $855,000, above its reserve of $825,000. Another notable sale was a three-bedroom house in Northmead, which fetched $1.5 million, $100,000 above reserve.

Other cities also saw varied auction outcomes. Brisbane posted a clearance rate of 47.6%, its weakest result since April 2023, while Adelaide recorded a strong 72% success rate. Canberra saw 55.6% of auctions result in sales.

With the ongoing challenges, experts predict that vendors may be forced to slash prices further to attract buyers.

Australian Property Market Growth (2004-2024)

This report outlines the growth of the Australian property market over the past 20 years across New South Wales (NSW), Victoria (VIC), Queensland (QLD), Western Australia (WA), and South Australia (SA).

Key Growth Points and Reasons

• 2009: Post-GFC, low interest rates and government incentives drove demand.
• 2013: Economic recovery and international demand boosted property prices.
• 2020: Pandemic saw a housing boom due to low interest rates and increased demand for space.
• 2022: Inflation and supply chain issues impacted prices, driving growth further. See the attached chart for detailed property price growth across the states.

See the attached chart for detailed property price growth across the states.