Property prices could make new highs in 2024

If the current rebound in property values continues, prices will hit new highs in January 2024, according to a new report.

According to the new  PropTrack Market Insight Report, if the pace of property price growth recorded over the past quarter continues, prices could return to positive annual growth in July 2023 and chalk up a 4 per cent rise over the course of the year.

PropTrack Senior Economist Eleanor Creagh said after five months of price growth, stronger market conditions are becoming more widespread in 2023.

“The housing market has so far avoided the steep falls many expected,” Ms Creagh said.

“Housing demand is stronger, likely bolstered by the surge in net overseas migration, as well as very tight rental markets.

“Given limited new stock is coming to market, buyer interest is being concentrated, which is underpinning home prices and offsetting the downward pressure from interest rate rises.”

To date, prices have risen across the country, led by Sydney which also experienced the largest drawdown.

“Sydney has seen prices quickly rebound this year, up 3 per cent from the low in November 2022,” Ms Creagh said.

“If home prices continue to grow at the same pace as over the past quarter, they could return to positive annual growth by the end of June and surpass their prior peak by December 2023.”

Source: PropTrack

Ms Creagh said Canberra and Brisbane have also recorded a rapid turnaround in prices. 

“Home prices in Brisbane are up 2 per cent so far this year and could be on track to return to positive annual growth by July 2023, surpassing their prior peak by September 2023,” she said.

“Home prices in Canberra could return to positive annual growth in October 2023, surpassing their peak in late 2024.”

She said Adelaide and Perth bucked the falling price trend seen for much of last year and both capitals saw home prices climb to fresh peaks in May and are up 2.6 per cent and 3.1 per cent so far this year. 

“Home prices in Adelaide have hit fresh price peaks for the past eight consecutive months,” she said.

“If growth is maintained, both cities will continue to hit new price peaks throughout 2023.”

Despite the positive turnaround, there are still headwinds that could impact the current price increases Ms Creagh said.

“Price growth may wane if stronger market conditions improve seller confidence and spark a boost in stock coming to market,” she said.

“Interest rates also rose again in June and may rise further, which could slow the recovery.” 

Ms Creah said while interest rates are closer to their peak than not, the shock of rate rises has lessened. 

“Population growth, tight rental market conditions and a housing shortfall are also expected to remain,” she said.

“If stronger demand holds up against the expected slowing of the economy, most capital city markets would return to positive annual price growth in the coming months.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.