Australia’s property market shows signs of cooling as 2024 ends, offering mixed prospects for homeowners and first-time buyers about house prices.
The CoreLogic Home Value Index reveals that national housing values edged up by just 0.1% in November, marking the slowest growth rate since January 2023 and suggesting a plateau in the market’s 22-month upswing.
Major cities like Sydney and Melbourne are experiencing downturns, with Sydney’s values declining by 0.2% and Melbourne’s by 0.4% last month. Regional areas and mid-sized capitals, which previously fuelled growth, are also seeing momentum fade. However, Perth leads the way with a 1.1% rise in November and a 21% annual increase, though growth has softened compared to earlier in the year.
Stock levels above 5-year averages for Sydney & Melbourne
For homeowners, the rebalancing of the market could mean slower equity growth, but it may also bring steadier conditions for those planning to sell. On the flip side, first-home buyers may find more opportunities as vendor activity increases and the volume of properties advertised for sale grows, particularly in Sydney and Melbourne, where stock levels are now above their five-year averages.
Rental markets are stabilising, with national rents rising by 5.3% over the past year—less than half the growth seen during the pandemic. Perth remains a standout, with house rents up by 8.7% annually. The slower pace of rental increases reflects improving affordability, as household sizes normalise and demand cools.
Property outlook for 2025
Looking ahead to 2025, market forecasts hinge on economic conditions. Interest rate cuts are expected mid-year, potentially lifting buyer confidence and borrowing capacity. However, affordability challenges and high construction costs remain significant hurdles. Additionally, an undersupply of new housing persists, especially as labour and materials costs deter new builds.
Tim Lawless, CoreLogic’s research director, says, “A couple of rate cuts might stabilise declining home values, but substantial upward pressure is unlikely until affordability barriers ease significantly.”
Geopolitical uncertainties and Australia’s upcoming federal election add layers of unpredictability. Housing policy and supply-side solutions are expected to feature prominently in political discussions, as achieving the national goal of 1.2 million new homes remains daunting.
For first-home buyers, the coming year may bring a mix of stability and opportunity, especially if interest rates decline as predicted. Patience and readiness to act when favourable conditions arise could be key. Meanwhile, homeowners should focus on navigating this transitional phase with long-term goals in mind, whether upgrading, refinancing, or holding steady.
While no dramatic price surges are expected, the housing market’s evolution in 2025 will depend on balancing demand, affordability, and the broader economic landscape. Understanding these dynamics will empower buyers and owners alike to make informed decisions in a more stable property environment.
Monthly change in capital city home values
