What’s happening with property values in 2024?

If buying a home is a priority this year, here are some thoughts on where property values might be headed in 2024.

Before we pull out the crystal ball for the coming year, let’s look back at the change in home values we saw over the past 12 months.

In 2023, despite five official rate hikes, increases in living costs due to inflationary pressures, home values still increased nationally by 7%.

On top of that, there were three capital cities which experienced growth above the national average, namely Sydney (up 10.2%), Brisbane (10.7%) and Perth (13.5%).

But it wasn’t just an increase in housing value many found surprising.

The speed at which properties were snapped up was also interesting, with Domain reporting that properties in some suburbs of Perth, Sydney, Brisbane and Melbourne only took an average of 8 – 21 days to sell.

Are property values expected to keep rising in 2024?

According to CoreLogic’s monthly data for January 24, home values across Australia rose 0.4% – making it the 12^th straight month of value rises.

However, if we look a little deeper into the data, housing market performance varied across the country. Melbourne, Canberra and Hobart actually recorded subtle declines in home values over the last month (ranging from -0.1% to -0.7%).

Are higher interest rates starting to take a little heat out of the market?

Maybe, maybe not. It’s a little hard to be sure because the factors which contributed to increased house prices in 2023 are still present.

Whilst plenty of experts are predicting house prices will continue to rise in 2024, the rate of growth is expected to soften.

What’s supporting property value growth, despite higher interest rates?

Strong population growth:

Population growth is rebounding strongly, driven by high immigration levels. More people typically leads to a higher demand for housing.

Domain’s “2023 End of Year Wrap and 2024 Outlook” suggests that “unprecedented” population growth will exert “extraordinary upward price pressure” on the property market.

Undersupply of housing:

It appears we’re not building enough new homes.

Australia’s housing shortage made headlines through 2023, and with building approvals for new homes reportedly now below average levels, it’s unlikely this will change anytime soon.

A super tight rental market:

The rental market is now playing a larger role in our housing market, with vacancy rates at record lows. Increasing numbers of Australians are renting, and for longer, as housing affordability continues to be stretched.

Your decision to buy an owner occupier home is more likely to be related to your personal circumstances (and ability to purchase), rather than the “perfect” time to buy according to market cycles.

If you’re keen to understand your options (so you’re ready to buy when you want to!), call our team on 02 6286 6501.

Alternatively, you can get started here.

This post was published 26 Feb 2024

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