Property Market Update - July 2024

At the end of the 2024 financial year, the national property market had increased about 8%, however it was a vastly different story across the major Australia geographies. 

The solid growth figure was in the face of challenging economic conditions, with the ongoing supply issue being the material driver. 

The minor capitals, led by Perth and followed by Adelaide and Brisbane saw super strong growth (Perth over 20%). Sydney was around the 6.3% mark whilst Melbourne had a tough time off the back of state policy changes landing them at 1.3%. Hobart had the toughest year, with prices dropping by 0.1%.

A comforting factor is that growth normalised in the latter 6 months of the period, when growth was steady at about 1.5% per quarter. This is viewed as healthy news after the rapid peaks of the COVID period followed by heavy rate increases that subsequently saw the market take a dive.

Supply remains the key issue in Australia and has propped up property prices for some time, and will continue to do so given there’s no immediate fix to our housing supply woes. Particularly with population growth of around 2.5% pa during a period of record migration. 

With the construction industry having a tough time and no material government fixes imminent it’s these supply issues that will prop prices up for a number to years to come. 

Interestingly and despite expectations of easing economic conditions, national property growth is expected to be around 5% in 2024 and 7% in 2025, again off the back of no fix to supply issues. 

A lot remains to be seen on how things play out in relation to interest rates, and if the government can produce meaningful supply relief, however with interest rates priced into economists forecast, and supply battles to remain, all things considered the Australia property market continues to look sturdy despite predicted slowing of growth.