Australian Housing Market: Growth Predicted but with Regional Variations - Property Inc

Australian Housing Market: Growth Predicted but with Regional Variations

The Australian housing market is expected to continue its upward trajectory through 2024 and 2025, with significant increases projected in major cities like Perth, Adelaide, Brisbane, and Sydney. According to a new Domain report, house prices in these capitals could see a rise of 4 to 7 percent, while unit prices might grow by 3 to 5 percent, as reported by Allison Worrall.

Dr. Nicola Powell, Domain’s chief of economics and research, notes that while the growth rate is modest compared to previous years, certain areas like Perth and Adelaide are experiencing robust increases. “Adelaide has been like a steam train – you can’t stop it,” Dr. Powell states, highlighting the unstoppable rise in these regions.

By the end of 2025, Sydney’s median house price is expected to exceed $1.7 million, with Perth not far behind at $800,000. Brisbane and Adelaide are poised to approach or surpass the $1 million mark. The Gold and Sunshine Coasts are also predicted to see house price increases of 3 to 6 percent and 2 to 5 percent respectively.

However, the report indicates a contrast in Melbourne’s real estate market, which is expected to see a modest annual growth of up to 2 percent. “This represents the slowest and most inconsistent recovery in the city’s history,” Dr. Powell commented, suggesting a mixed impact on different types of buyers.

Dr. Powell also points out that the ongoing cost-of-living crisis, compounded by high interest rates, continues to strain household affordability across Australia. Despite the Reserve Bank maintaining the official cash rate at a decade-high of 4.35 percent, the upcoming stage 3 tax cuts could improve borrowing capacity and buying power.

Yet, real wage declines might offset these benefits. “If wage growth stays at its current level, we will continue to see stretched affordability and dampened demand,” she explained.

On a regional level, the outlook is mixed, with moderate growth expected over the next 12 months. Changes to the migration system could shift demand away from regional areas, as new skilled visa streams reduce the necessity for migrants to reside in these areas initially.

As Australia braces for these changes, the real estate market remains a critical indicator of economic health and household sentiment. With property prices rising, prospective buyers and current homeowners will need to navigate a complex landscape marked by both opportunities and challenges.

References:

https://www.domain.com.au/news/what-are-predicted-house-prices-for-2024-and-2025-in-australia-1294450/ 

Related Articles

Responses