Australian Housing Market: A Period of Moderation in 2024 with a Focus on Melbourne’s Rising Median Values
Australia’s housing market, which has recently witnessed substantial growth, is projected to experience a more restrained expansion in 2024. This shift is highlighted in two insightful articles by Swati Pandey and Alesha Capone, focusing on the broader Australian market and Melbourne’s specific trends, respectively.
In her piece titled “Australian House Price Growth Seen ‘Muted’ in 2024, Oxford Says,” Swati Pandey elaborates on Oxford Economics’ predictions of a subdued housing market in Australia. Oxford Economics Australia’s senior economist Maree Kilroy forecasts a national home price growth of 2.7% in 2024, a notable deceleration from the 8.1% surge witnessed in 2023. Kilroy attributes this moderation to several factors, including rate hikes, cost of living pressures, and deteriorating housing affordability. “Deteriorating housing affordability will continue to play a key role in containing the pace of growth, especially for houses,” Kilroy emphasizes, highlighting the ongoing challenges in the market.
Alesha Capone’s article, “Melbourne’s Median House Value Forecast to Reach a New Top Sum: Oxford Economics Australia,” offers a more localized perspective, focusing on Melbourne’s housing market. According to Kilroy, Melbourne’s median house price is set to rise significantly, reaching a record high of $1.16 million by mid-2026. This increase represents a substantial jump from December 2023’s median value of $1,047,300. Capone notes that despite a less dynamic outlook for the next 12 months, a resurgence in migration is expected to fuel recovery from mid-2025.
Both articles underscore the varying predictions for Australia’s property market. While PropTrack’s Property Market Outlook Report projects a modest increase for Melbourne’s median house price this year, the Real Estate Institute of Victoria’s president, Jake Caine, expects median values to remain stable, with units outperforming houses. “For everyone who gets priced out and pushed down into a lower price bracket, that in turn pushes someone else down,” Mr. Caine explains, illustrating the ripple effects of the market shifts.
Major banks like Westpac, NAB, and ANZ, along with Commonwealth Bank’s Gareth Aird, have their own forecasts, varying between 3 to 5.5 percent growth in Melbourne’s property prices for 2024. Aird specifically mentions that national property values are likely to climb by 5 percent, though Melbourne’s growth might lag until potential interest rate cuts by the Reserve Bank of Australia.
In summary, while Australia’s overall housing market braces for a period of moderation in 2024, Melbourne’s median house values are expected to reach new heights, driven by various economic factors and migration trends. The insights provided by Pandey and Capone offer a comprehensive view of the challenges and opportunities in the Australian real estate landscape.
References:
https://finance.yahoo.com/news/australian-house-price-growth-seen-140000603.html
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