Real Estate Market Insights: Predicting Australia's Home Prices for 2024 and 2025

Realty prices throughout most of the country will continue to increase in the next financial year, led by sizeable gains in Perth, Adelaide, Brisbane and Sydney, a brand-new Domain report has anticipated.

House rates in the major cities are anticipated to increase between 4 and 7 percent, with system to increase by 3 to 5 percent.

By the end of the 2025 fiscal year, the median house rate will have surpassed $1.7 million in Sydney and $800,000 in Perth, according to the Domain Projection Report. Adelaide and Brisbane will be on the cusp of splitting the $1 million average home rate, if they haven't currently strike seven figures.

The Gold Coast housing market will also soar to brand-new records, with costs anticipated to rise by 3 to 6 per cent, while the Sunshine Coast is set for a 2 to 5 percent boost.
Domain chief of economics and research study Dr Nicola Powell stated the forecast rate of growth was modest in most cities compared to price motions in a "strong increase".
" Rates are still increasing however not as fast as what we saw in the past financial year," she said.

Perth and Adelaide are the exceptions. "Adelaide has resembled a steam train-- you can't stop it," she stated. "And Perth simply hasn't slowed down."

Rental costs for apartments are anticipated to increase in the next year, reaching all-time highs in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, and the Sunlight Coast.

According to Powell, there will be a basic cost rise of 3 to 5 percent in local systems, suggesting a shift towards more budget-friendly home alternatives for buyers.
Melbourne's property market stays an outlier, with anticipated moderate annual growth of approximately 2 per cent for houses. This will leave the typical home price at between $1.03 million and $1.05 million, marking the slowest and most irregular recovery in the city's history.

The 2022-2023 decline in Melbourne covered five successive quarters, with the mean house price falling 6.3 percent or $69,209. Even with the upper forecast of 2 per cent development, Melbourne house prices will just be just under midway into healing, Powell said.
Home prices in Canberra are prepared for to continue recovering, with a projected moderate development varying from 0 to 4 percent.

"According to Powell, the capital city continues to deal with challenges in attaining a stable rebound and is expected to experience an extended and sluggish rate of progress."

The forecast of upcoming cost hikes spells problem for prospective property buyers struggling to scrape together a deposit.

"It implies different things for various types of purchasers," Powell said. "If you're an existing homeowner, prices are anticipated to rise so there is that component that the longer you leave it, the more equity you might have. Whereas if you're a first-home buyer, it may mean you need to save more."

Australia's real estate market stays under significant pressure as homes continue to grapple with price and serviceability limits in the middle of the cost-of-living crisis, heightened by continual high rate of interest.

The Reserve Bank of Australia has actually kept the official cash rate at a decade-high of 4.35 percent because late in 2015.

The lack of brand-new housing supply will continue to be the primary driver of residential or commercial property prices in the short term, the Domain report stated. For years, real estate supply has been constrained by shortage of land, weak structure approvals and high construction expenses.

In rather positive news for prospective purchasers, the stage 3 tax cuts will deliver more money to families, lifting borrowing capacity and, therefore, purchasing power throughout the country.

Powell stated this might further boost Australia's real estate market, but may be balanced out by a decline in real wages, as living costs increase faster than incomes.

"If wage growth stays at its existing level we will continue to see extended affordability and dampened need," she stated.

In regional Australia, home and system rates are expected to grow moderately over the next 12 months, although the outlook varies between states.

"At the same time, a growing population propped up by strong migration continues to be the wind in the sail of home price growth," Powell said.

The current overhaul of the migration system could result in a drop in need for local property, with the introduction of a new stream of competent visas to get rid of the reward for migrants to live in a regional area for two to three years on going into the nation.
This will suggest that "an even greater proportion of migrants will flock to metropolitan areas looking for much better task prospects, thus dampening demand in the local sectors", Powell stated.

Nevertheless local locations near metropolitan areas would remain attractive locations for those who have been priced out of the city and would continue to see an influx of need, she included.