2024 begins with more property growth and price records
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Australian home values pushed forward to another all-time high over January as the trends set out in the latter stages of last year carried over into 2024.
The latest CoreLogic report showed a new national median price record being set for the month, although three key cities are still doing the bulk of the heavy lifting.
As the new year unfolds, can those trends continue?
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National property prices: January 2024
Australia's median property price rose another +0.4 per cent over January, bringing annual gains to +8.7 per cent.
A two-speed market dynamic has been clearly established, though.
| Market | Month | Quarter | Annual | Median value |
|---|---|---|---|---|
| Sydney | 0.2% | 0.1% | 11.4% | $1,122,430 |
| Melbourne | -0.1% | -0.9% | 3.9% | $777,250 |
| Brisbane | 1.0% | 3.2% | 14.8% | $796,818 |
| Adelaide | 1.1% | 3.7% | 10.3% | $721,376 |
| Perth | 1.6% | 4.9% | 16.7% | $676,823 |
| Hobart | -0.7% | -1.5% | -0.4% | $651,807 |
| Darwin | 0.3% | 0.7% | -0.1% | $501,520 |
| Canberra | -0.2% | 0.2% | 1.2% | $842,971 |
| Combined capitals | 0.4% | 1.0% | 10.0% | $836,013 |
| Combined regional | 0.4% | 1.2% | 4.9% | $605,085 |
| Australia | 0.4% | 1.0% | 8.7% | $759,437 |
Sydney and Melbourne once again held close to flat after losing steam towards the end of 2023.
Brisbane, Adelaide and Perth, meanwhile, all saw growth of at least +1 per cent, again setting new all-time highs for each of the three capitals. Perth's annual gains have now reached a staggering +16.7 per cent.
Darwin and Hobart have proved more volatile in recent months, bouncing between growth and declines, while Canberra has held relatively level.
Regional markets generally reflected their capital city counterparts, with regional WA coming out as the top performer once again.
Three key takeaways from the current market
A number of themes have taken root across the market that look set to continue in the near future.
Houses are outpacing units despite affordability pressures
The rebound in 2023 saw a widespread uplift in property values around the country. While high prices are pushing some buyers to adjust their expectations, a shortage of available stock is still driving house prices up faster than units.
“It seems that most Australians are willing to pay a higher premium than ever for a detached home,” CoreLogic's research director Tim Lawless explained.
“Since the commencement of the upswing, capital city house values have surged +11.0 per cent higher while unit values are up +6.9 per cent.”
Perth is having its moment in the sun
It's been an explosive period for Perth since the pandemic, boosting the city's property markets after a relatively muted decade.
The +1.6 per cent growth seen in January continued a string of similar monthly gains that have pushed Perth's median home price up by more than $110,000 over the past year.
"The western capital continues to see housing demand outweigh supply, helping to push values +16.7 per cent higher over the past 12 months. Despite that, housing prices remain relatively affordable compared with most capital cities, with the median dwelling value sitting just under $677,000," Mr Lawless said.
With Perth's population growing at a rapid rate, the city's appeal may continue to push prices higher still.
Ultimately, homes are still selling
The RBA's battle to bring inflation under control has been painful for homeowners and home buyers alike, but the market is still in full swing.
"Despite ongoing cost of living pressures, high interest rates, low consumer sentiment and affordability constraints, homes are still selling," Mr Lawless said.
"Housing demand has been buoyed by high migration, but also tight rental markets that have probably incentivised renters to transition towards home ownership if they can afford to do so."
Regional growth is now back on par with the capitals
2023 was generally a slower year for regional markets than their capital city counterparts, but that momentum has slowly shifted.
| Market | Month | Quarter | Annual | Median value |
|---|---|---|---|---|
| Regional NSW | 0.4% | 0.8% | 2.9% | $708,181 |
| Regional VIC | 0.0% | 0.3% | -1.3% | $568,691 |
| Regional QLD | 0.5% | 1.8% | 9.3% | $611,636 |
| Regional SA | 0.9% | 1.5% | 8.7% | $392,982 |
| Regional WA | 1.1% | 3.9% | 9.7% | $465,739 |
| Regional TAS | -0.7% | -1.2% | -1.5% | $497,646 |
| Combined capitals | 0.4% | 1.0% | 10.0% | $836,013 |
| Combined regional | 0.4% | 1.2% | 4.9% | $605,085 |
Over the past three months, combined regional gains have overtaken the capitals for the first time in nearly a year.
"While both the combined capitals and combined regional markets are losing momentum in the pace of value growth, the capital city trend has slowed more sharply, mostly due to the flattening of growth conditions in Melbourne and Sydney," Mr Lawless explained.
"Across the other states, regional WA, SA and Queensland continue to record a slower pace of growth relative to their capital city counterparts; these are also the three regional markets where dwelling values are at record highs."
What's next for Australian property?
Like 2023, Australia's property markets in 2024 are expected to be largely tied to what happens with interest rates.
Unlike the previous year, though, Australians will be waiting in the hope of seeing the cash rate go down, not up.
Eliza Owen, CoreLogic's head of residential research Australia, noted that "With inflation currently trending just below RBA forecasts, the case for a cash rate reduction is firming up in 2024."
With that in mind, she said "The broad expectation for housing values in 2024 is that the market will still grow but at a slower rate than the 8.1% observed in CoreLogic's Home Value Index in 2023."
Considering the current high interest rate environment alongside cost of living pressures and poor consumer sentiment, she said households may be "hesitant to make high-cost, high-commitment decisions."
But demand is still outweighing supply and "ongoing constraints in the construction sector are likely to keep a floor under home values."
"Despite some of the headwinds for market demand, growth is still expected to be positive throughout 2024," Ms Owen concluded.
