Australian Home Prices Cool Off as 2024 Approaches
Home prices in Australia see their first decline in nearly two years as high mortgage rates impact affordability and more sellers enter the market
Sydney, Australia, Home Prices, Real Estate, Mortgage Rates
SYDNEY: So, it looks like home prices in Australia are finally taking a breather. December marked the first monthly drop in almost two years, and it’s all about those high mortgage rates making things tough for buyers.
According to CoreLogic, prices dipped by 0.1% nationwide last month, with major cities like Sydney and Melbourne seeing even bigger drops of 0.6% and 0.7%, respectively. Meanwhile, Brisbane, Perth, and Adelaide are still hanging in there with some gains.
Tim Lawless from CoreLogic mentioned that the growth in housing values has been slowing down, mainly because buyers are feeling the pinch and more homes are hitting the market.
Even with the recent dip, property values for the whole of 2024 are still up by about 4.9%. That’s roughly an extra A$38,000 added to the median home value, which is now around A$1.2 million in Sydney.
Interestingly, the value of land and housing owned by households jumped by A$851 billion in just a year, reaching a whopping A$11.3 trillion by September.
It’s been a wild ride for the housing market, especially with interest rates hitting a 12-year high of 4.35% late last year. The Reserve Bank of Australia is hinting at possible rate cuts soon, but experts think it’ll take more than a few cuts to really shake things up.
Lawless pointed out that we shouldn’t expect a big surge in home values just because rates might drop a bit. A recent poll even suggested that home prices could rise about 5% in 2025 and 2026, thanks to strong population growth and not enough new homes being built.