Australia’s Property Market Sees Continued Growth in Early 2024, Though Major Cities Struggle - Property Inc

Australia’s Property Market Sees Continued Growth in Early 2024, Though Major Cities Struggle

The Australian property market has maintained its upward trajectory in the early months of 2024, with a continuous rise in house prices and rents, as reported by Cait Kelly and the Business Times. This ongoing surge marks the 12th consecutive month of value increases in the housing market.

According to CoreLogic data, house values saw a modest rise of 0.4% in January, continuing the trend observed throughout the previous year. Tim Lawless, CoreLogic’s research director, highlights the noteworthy performance of the Western capital, Perth, which led the capital city increases with a 1.6% rise in January. “The western capital continues to see housing demand outweigh supply, helping to push values 16.7% higher over the past 12 months,” Lawless explains, noting the median dwelling value in Perth sits just under $677,000, still relatively affordable compared to other capital cities.

However, the national picture is varied, with some capitals like Melbourne, Hobart, and Canberra experiencing slight declines. Despite this, the general trend in house values continues to outpace that of units, with a record 45.2% gap in median values between the two.

The rental market is not left behind in this upswing, experiencing its biggest monthly rise since April, with rents increasing by 0.8% in January. This follows a 0.65% rise in December, adding to the financial strain on renters. Lawless observes a common trend of rent growth accelerating between January and March, indicating a potential continuation of this pattern.

The surprising resilience of Australia’s property market, as reported by the Business Times, continues despite challenges like high interest rates, cost of living pressures, and low consumer sentiment. This resilience is partly attributed to high migration and tight rental markets, which, as Lawless suggests, “have probably incentivised renters to transition towards homeownership if they can afford to do so.”

The Reserve Bank of Australia’s (RBA) policy decisions and macroprudential settings are expected to play a significant role in shaping the housing market in 2024. Lawless points to the 3-percentage point buffer on home loan servicing assessments as a major hurdle to demand, suggesting that any adjustments by the Australian Prudential Regulation Authority (APRA) could significantly impact the market.

In conclusion, while Australia’s property market shows signs of continued growth, the situation remains complex, with varying trends across different regions and sectors. Homebuyers and investors will need to navigate these dynamics carefully, keeping an eye on future policy changes and market trends.


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