After a sharp rebound in the Australian property market in 2023, market expectations are that prices will slow this year as factors supporting price growth gradually fade. Oxford Economics Australia, an economic analysis firm, states that the housing market has recovered the ground lost in 2022, with the average Australian house price reaching a new high of A$939,000 in December 2023. Oxford's "Residential Property Outlook" report predicts continued growth until 2026, with 2024 expected to be a key turning point.<\/p>\n\n\n\n
"The positive factors supporting price growth through 2023 have begun to fade," the report said. "Auction clearance rates have slowed from 701 to just under 601 per 3T, while monthly price growth has plateaued, with some capital cities recording quarterly declines."<\/p>\n\n\n\n
Maree Kilroy, senior economist for Australia at Oxford Economics and author of the report, said the performance of the capital cities had diverged in recent months: "Property listings are rising in Melbourne and Sydney, and we expect this trend to continue over the coming quarters, moderating price growth.Perth, Brisbane and Adelaide<\/strong>"Favorable factors are driving price increases in these cities. Low listings and relatively affordable housing in some areas will continue to support prices in these cities next year."<\/p>\n\n\n\n Overall, the following factors are contributing: interest rate cuts starting at the end of 2024 will increase lending, further accelerating overall house price growth. However, the unaffordability of housing over the past two years has also put a cap on price growth. However, the ongoing housing shortage in Australia's most populous regions is putting a floor under prices.<\/p>\n\n\n\n The company forecasts that the median price of all dwellings will increase by 6.31t\/3t annually through fiscal year 2026. This is coupled with record overseas migration and an exceptionally low national vacancy rate of 11t\/3t. National rents are projected to increase by 14.31t\/3t in 2023, with apartment rents experiencing particularly strong growth (18.31t\/3t). Quarterly growth has slowed from its peak but will remain elevated in the short term. Rents for houses and apartments are projected to increase by 4.11t\/3t and 5.81t\/3t, respectively, in 2024.<\/p>\n\n\n\n "Rental affordability has deteriorated over the past two years," Kilroy said. "This has been particularly pronounced in Sydney and Adelaide, forcing the formation of larger rental households."<\/p>\n\n\n\n Due to current limited housing production capacity and the delivery of new buildings, the ability to increase rental supply in the market remains limited. However, with the expected completion of more new buildings in 2024, the rental market will be enriched. More importantly, many families will transition to owning their own homes, reducing housing demand.<\/p>\n\n\n\n "Perth's rental market is expected to outperform over the forecast period, driven by nation-leading population growth and relative affordability," Kilroy said. However, households' ability to afford rents has peaked. As a result, rental growth is forecast to fall to an average of 2.61T\/3T over the two years to June 2026 \u2013 in line with consumer inflation.<\/p>\n\n\n\n The report found that rental returns have increased, benefiting those who have taken out mortgages to buy properties. Looking ahead, interest rate cuts, starting at the end of 2024, will ease the costs of leveraging properties. However, state and federal governments have begun increasing fees for domestic and foreign residential property investors, so the impact on investment property remains to be seen. Late last year, the federal government announced increases in taxes on foreign property purchases, increased the withholding tax rate for foreign sellers of properties to 15% (from 12.5%), tripled the foreign investment fee on existing homes, and doubled the vacancy tax for foreign investors.<\/p>\n\n\n\n Sydney's median house price is projected to reach a record high of 10.31 TWh in 2023, reaching A$1.6 million in the December 2023 quarter. However, the pace of growth is slowing, significantly impacted by a further interest rate hike in November and an increase in the total housing supply. Declining auction clearance rates suggest weakening demand. Oxford Economics Australia projects this trend will continue until early 2024, resulting in only 3.31 TWh growth for house prices and 5.21 TWh growth for units.<\/p>\n\n\n\n "Given the current shortage of housing stock, interest rate cuts will drive the next wave of price growth starting in late 2024," Kilroy said. Housing affordability remains a major issue in Sydney. Oxford Economics Australia predicts that relatively low apartment prices will support stronger growth in the short term. By June 2026, Sydney's median house and apartment prices are projected to increase by 5.91% and 8.31% respectively.<\/p>\n\n\n\n The market has moderated as Melbourne's total housing supply has increased, providing buyers with more choice and reducing their urgency to buy. The increasingly pronounced slowdown in market growth suggests demand is shifting from more expensive properties to the middle of the market as prices become unaffordable. Economist Kilroy noted that auction clearance rates are trending downward, while investor lending growth in Victoria is the weakest among the inland states. At the same time, investors are becoming more active in sellers' markets.<\/p>\n\n\n\n Furthermore, market sentiment is being impacted by policy headwinds. The Victorian government announced a series of policy changes impacting property investors, including an expansion of the vacant residential land tax, imposing an additional 1% on residential land in Melbourne's established areas that remains undeveloped for more than five years, and lowering the land tax exemption threshold from AUD 300,000 to AUD 50,000, effective January 1st. Starting in 2025, a return of immigration will be a key support for a recovery in housing demand. In addition to a sharp rebound in overseas visitors, net interstate migration in Melbourne has almost returned to equilibrium. By June 2026, median house and unit prices are projected to increase by 5.5% and 6.5%, respectively. By then, Melbourne's median house price will reach AUD 1.16 million.<\/p>\n\n\n\n After bottoming out in the December 2022 quarter, Brisbane emerged as one of the strongest performing markets in 2023. The number of properties listed for sale was over 30% below average, while sales were nearly 5% above average. "The Brisbane market continues to benefit from its relative affordability compared to the southern capitals, as well as strong future employment prospects, demand driven by interstate and overseas migration, and a scarcity of new residential supply," Kilroy said.<\/p>\n\n\n\n The report projects Brisbane's median house price to grow by 5.91% in fiscal year 2024, the third-largest increase after Perth and Adelaide. Interest rate cuts starting in late 2024 will contribute to stronger price growth by 2026. Demand fundamentals are expected to remain strong, driven by Queensland's leading population growth. Furthermore, the 2032 Olympic Games are expected to fuel continued optimism among developers and buyers from mid-decade onward.<\/p>\n\n\n\n On November 20, 2023, Queensland will double the first-time homebuyer grant to A$30,000, applicable to new homes, and will end on June 30, 2025, shifting demand away from low-end established homes, but the impact on median house prices is expected to be minimal.<\/p>\n\n\n\n Adelaide's property market has proven resilient. South Australia continued to record historically strong population growth in 2023, running at a record rate of 1.71 TPV, with net overseas migration in the state on an upward trend. Mr Kilroy said: "In recent years, Adelaide's population growth has been driven primarily by returning expatriates and increased interstate inflows. These individuals have higher average purchasing power, which has been a key factor supporting prices and driving market momentum."<\/p>\n\n\n\n Despite recent market activity, Adelaide has maintained its affordability advantage over the east coast, and a tight rental market may also be encouraging more homeowners to choose to live in their homes. Since August 2023, the number of homes listed has begun to decline, and this, combined with solid demand, has led to stronger price growth.<\/p>\n\n\n\n The median price of all housing types is forecast to grow at an average annual rate of 5.81% to $804,000 over the three years to 2026.<\/p>\n\n\n\n Perth is Australia's top-performing capital city in terms of price growth. It has successfully bucked the national housing market downturn, achieving near-double-digit growth in property prices. With the lowest median house price of all major capital cities, the western capital has consistently maintained a significant affordability advantage over other cities. In the near term, fundamental factors remain positive.<\/p>\n\n\n\n Western Australia continues to record nationally leading population growth (3.11 million in 2023), while unemployment remains low. Severe capacity constraints persist, delaying new home completions. This, combined with soaring construction costs and strong rental growth, is shifting owner-occupier demand toward existing housing stock. The number of properties listed for sale is trending downward in 2023, while homebuying activity remains above average. These factors combine to exert upward pressure on prices, and this momentum is expected to continue in the near term. Perth leads other cities over the forecast period and is well-positioned to capitalize on the city's housing stock shortfall.<\/p>\n\n\n\n Median house prices are projected to grow by over 10% in 2024, slowing to a still respectable 9.8% in 2025. Perth prices are expected to surpass Adelaide by mid-2025, rising by over 9.7% annually over the next three years. Risks are tilted to the upside, as the Perth property market demonstrates a propensity for significant price fluctuations during price cycles.<\/p>\n\n\n\n In 2023, Canberra's median house price fell by A$641,000 to A$968,000, the largest decline nationwide. New listings were higher than in previous years, limiting competition for stock and preventing the rebound seen in other cities. This was coupled with the opening of new student accommodation and a surge in housing completions of A$151,000 in fiscal 2023. Oxford Economics Australia predicts that house and apartment prices in Canberra will remain relatively stable through fiscal 2024, maintaining its position as Australia's second-most affordable market.<\/p>\n\n\n\n The support for house prices comes from above-average public sector wages, which grew by 3.5% in the year to September 2023, the fastest growth rate since June 2011. With interest rate cuts starting at the end of 2024, household financial pressure will be reduced, providing support. At the same time, with the continued return of international students, apartment prices are expected to continue to outpace house prices, growing at an average annual rate of 6.3% and 5.9% respectively, and are expected to exceed the median of A$1 million again in 2025.<\/p>\n\n\n\n Hobart's median house and unit prices are forecast to fall by 1.4% and 3.2% respectively in fiscal 2024. Hobart's performance is different from other capital cities due to unaffordable housing conditions and the slowest population growth in the country, which is leading to more moderate demand.<\/p>\n\n\n\n Hobart's net interstate outmigration has increased, reflecting a post-COVID-19 reset in migration patterns (from younger adults and lifestyle changes). Falling interest rates from late 2024 and a strong public investment pipeline are expected to boost price growth from FY25.<\/p>\n\n\n\n Darwin was the weakest performing market in fiscal 2023. Median house prices fell by $891,000 to $536,000, while units fell by $591,000 to $376,000. Despite being Australia's most affordable capital city and boasting competitive rental returns, Darwin's market remains weak. Quarterly price fluctuations indicate a lack of market momentum. After a period of sustained weakness, population inflows improved, increasing by $0.91,000 in fiscal 2023.<\/p>\n\n\n\n While the outlook for mining investment is less optimistic than before the pandemic, government investment, particularly in the defense sector, will continue to drive employment growth, and the labor market is expected to perform relatively well over the next few years. Housing prices are projected to initially grow by 3.31t\/3t in fiscal year 2024, accelerating significantly in fiscal year 2025 (71t\/3t) and fiscal year 2026 (8.21t\/3t). This will push the median price to a new record high of A$641,000. Apartments are expected to perform similarly, growing by approximately 81t\/3t annually over the three years to June 2026.<\/p>","protected":false},"excerpt":{"rendered":" \u6fb3\u6d32\u6a13\u5e02\u57282023\u5e74\u6025\u901f\u53cd\u5f48\u4e4b\u5f8c\uff0c\u7531\u65bc\u652f\u6490\u50f9\u683c\u589e\u9577\u7684\u56e0\u7d20\u9010\u6f38\u6d88\u9000\uff0c\u5e02\u5834\u666e\u904d\u9810\u671f\u4eca\u5e74\u6a13\u50f9\u5c07\u6703\u653e\u7de9\u3002\u7d93\u6fdf\u5206\u6790\u6a5f\u69cb\u6fb3 […]<\/p>\n","protected":false},"author":1,"featured_media":1050,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[34],"tags":[],"class_list":["post-1043","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-34"],"_links":{"self":[{"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/posts\/1043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/comments?post=1043"}],"version-history":[{"count":7,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/posts\/1043\/revisions"}],"predecessor-version":[{"id":1057,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/posts\/1043\/revisions\/1057"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/media\/1050"}],"wp:attachment":[{"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/media?parent=1043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/categories?post=1043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/anp-au.com\/en\/wp-json\/wp\/v2\/tags?post=1043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Rental growth expected to slow, approaching inflation<\/h2>\n\n\n\n
Sydney house price growth expected to slow as housing supply increases<\/h2>\n\n\n\n
Melbourne policy headwinds affect market sentiment<\/h2>\n\n\n\n
Brisbane is booming and developing<\/h2>\n\n\n\n
Adelaide housing is becoming more affordable and property prices are expected to remain high in the long term<\/h2>\n\n\n\n
Perth's best performance as capacity restrictions push up property prices<\/h2>\n\n\n\n
Canberra's workforce is declining, with the addition of Zheng likely to result in a 6-person job cut.<\/h2>\n\n\n\n
Hobart's net population outflow may rebound next year as interest rate cuts boost population<\/h2>\n\n\n\n
Darwin's worst performance last year could boost housing market<\/h2>\n\n\n\n