If you thought the Australian property market was going to get easier for potential buyers in 2024, you can think again.
Domain’s latest House Price Report for the December quarter has shown house and unit prices recently hit record highs across the country. The downturn of 2022 appears to have reversed itself towards the end of last year.
Adelaide saw the highest growth in the median house price, with properties in the capital city increasing 12.7 per cent from 2022. Perth followed closely behind on 11.9 per cent and Sydney jumped 10.6 per cent. Melbourne was lagging behind, however, Domain believes it will complete its ‘recovery’ later this year.
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The median house price in Sydney is $1.59 million, while a unit is $795,994. It’s better down south, with Melbourne recording $1.04m for the median house price and units are $579,506. Darwin is the cheapest capital city in Australia to buy, with the median house price at $640,806, while units are $371,096.
Many homeowners will be hoping for an interest rate cut from the Reserve Bank (RBA) sometime in 2024, this could make the situation even worse for potential buyers.
“What the latest data is telling us is that the prices are still rising, but the pace of growth is slower than what it was in the early stage of the recovery," Domain's chief of research and economics, Dr Nicola Powell, said.
“This pace is driven by new stock coming into the market, easing the competition, but not enough to halt price growth.
“Looking ahead to the rest of the year - in the shorter term, high interest rates will continue to exert stress on mortgage affordability and limit borrowing capacity. With an interest rate cut tipped to happen in the latter half of the year, we are expecting to see an increasing demand that will likely drive upward price pressures on the housing market.”
Powell said the tax cuts, due to kick in in July, could relieve some of the immediate cost-of-living pressures hitting Aussies hard at the moment.
She recommended buyers set “realistic expectations” on what you’d be able to afford in 2024 rather than reaching for the Moon. You might have to expand your search on areas you want to live in order to find the keys to your new home.
The RBA’s interest rate currently stands at 4.35 per cent and Finder’s RBA Cash Rate Survey discovered it would likely remain at that figure in February. However, experts believe there could be a cut by August.
There have been a whopping 13 rate hikes in the past two years, so a cut would provide a big reprieve for many mortgage holders.
AMP chief economist Shane Oliver said: "We expect a combination of falling December inflation data, weak December retail sales and a rising trend in unemployment to head off another rate hike in February.
“By June, enough evidence of weak growth and falling inflation will have accumulated to enable the RBA to start cutting rates."