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Property prices set for more growth in the next year

Australian property prices are now expected to rise as much as 5 per cent in 2024, with a property insights leader revising its forecast on the back of increased buyer demand and an uptick in listings.

In December 2023, PropTrack forecast national home prices would rise between 1 per cent and 4 per cent in the 2024 calendar year.

PropTrack Director of Economic Research, Cameron Kusher, the Property Market Outlook Report for June 2024 showed prices were now tipped to rise higher.

“We now expect that prices will increase by between 2 per cent and 5 per cent in the current calendar year,” he said.

“We have revised our forecast for price changes this year in Brisbane, Adelaide, Perth, Darwin and Canberra to be higher, largely reflective of the strong price growth momentum in these markets, low volume of stock for sale and the boost from income tax cuts from the middle of this year. 

“Price growth expectations are largely unchanged in Sydney and Melbourne, but we believe they are more likely to be on the higher-side of our forecasts.”

The report showed that property prices had already risen 2.7 per cent nationally from January to May, while for the financial year-to-date, they are up 5.9 per cent nationally.

Source: PropTrack Property Market Outlook Report June 2024.

Mr Kusher said the property market was proving to be far more resilient than anticipated.

He said national sales volumes were 13.9 per cent higher from January to May this year, that for the same period in 2023, while the median time a property listing is on had dropped to 38 days in May 2024, from 43 days at the same time last year.

“Buyer demand remains strong despite interest rates sitting at 12-year highs, borrowing capacities falling and the volume of stock for sale increasing, leading property prices to rise at a faster rate than expected,” Mr Kusher said.

“Over the next financial year, the introduction of Stage 3 tax cuts and projected interest rate cuts have the power to further entice buyer demand while supply from new dwelling commencements and completions are expected to remain low. 

“We expect home price growth will be slightly stronger by the end of the 2024-25 financial year than annual growth over the 2024 calendar year, with prices anticipated to rise in the larger markets of Sydney and Melbourne over the next 12 months while slowing in several capital cities.”

The report showed Perth is projected to lead home price growth again in the coming financial year, albeit at a slower pace.

Prices have risen 18.9 per cent this financial year-to-date, and are expected to rise a further 8 per cent to 11 per cent in the 2024/25 financial year.

Home prices are also tipped to rise between 3 per cent and 6 per cent in Brisbane, Sydney and Melbourne over the same time frame.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.