Overcoming a Range of Negative Factors: Australian Property Market Forecast for 2024
After a year of unprecedented challenges in the housing markets across Australia, experts have offered surprising forecasts for what lies ahead in the property market in 2024. Despite record-high home prices, a painful cost-of-living crisis, potential further interest rate hikes, and global economic uncertainty, data researchers and economists at the big four banks have delivered a surprising outlook.
In 2023, Australian home values surged by 8.1 per cent despite five interest rate rises, marking a significant reversal from the 4.9 per cent drop in 2022. This growth, however, started tapering off at the end of the year amid persisting cost-of-living pressures. The national average for home prices rose by over 5 per cent, while in capital cities, the surge escalated to about 10 per cent. Notably, Sydney’s home prices grew by 11.1 per cent, outpacing the national average, while Melbourne experienced a 3.5 per cent lift.
Despite the positive trends, experts acknowledge that most of last year’s growth occurred in the first half, and the annual data published by CoreLogic showed a sharp slowing in both capital cities after the Reserve Bank raised the cash rate to 4.1 per cent in June. These circumstances indicate that while there is a continued growth trend, the pace and trajectory of this growth may experience fluctuations.
Looking ahead to 2024, data researchers and economists at the big four banks have offered up their forecasts for real estate price movements, with all tipping continued growth in defiance of a range of negative factors. This forecast is particularly optimistic given the backdrop of uncertainty about the domestic and global economies.
While the potential for further interest rate hikes poses a significant concern, the surprising outlook for Australia’s property markets in the year ahead indicates resilience and a certain level of stability despite the economic challenges. The continued growth forecast by experts suggests that, despite the headwinds, the Australian property market may see sustained expansion in 2024, defying prevailing economic uncertainties.
