Strong results continue in Adelaide, Brisbane, and Perth property markets in Q1 2024, report shows

The first quarter of 2024 has continued to produce strong results with constrained listings underpinning Adelaide, Brisbane, and Perth in particular, according to the latest PIPA National Market Update.

The report pulls together insights and analysis from seven market experts and PIPA members from the latest edition of the PIPA Adviser e-magazine’s national market update.

PIPA Chair Nicola McDougall said some commentators have called time on the peak of buyer interest and sales activity in Perth, with median prices yet to reflect this potential state of play.

Market conditions in Brisbane and Adelaide remain robust, with Sydney resilient and Melbourne mostly stable, albeit with the significant exodus of investors from Victoria set to continue to negatively impact its rental crisis.

“There is no question that we are in the middle of a housing crisis, with not enough dwellings available for rent or purchase in many areas of the country,” McDougall said.

“Of course, we have heard the repeated assertions by the Federal Government of its plan to support the construction of 1.2 million new dwellings over the next five years, but everyone knows that figure has no basis in reality.”

According to the Australian Bureau of Statistics, net overseas migration was a staggering 550,000 in the year ending 30 September 2023 – a mind-boggling figure when considering the lack of housing supply currently available for renters.

“Not only does that tap need to be turned off dramatically, but more needs to be done at a policy level to encourage investors back into the market to help remedy the rental catastrophe,” McDougall said.

“An immediate reduction in the three percentage point borrowing serviceability buffer would be a good place to start.”

In New South Wales, the property market remains resilient, although there are some signs that 2024 might deliver more subdued sales and rental activity, according to Veronica Morgan, Principal, Good Deeds Property Advisors.

Sydney dwelling values remain on an upward trajectory, albeit at a reduced growth rate than for much of 2023, while inventory levels in regional NSW are higher than in Sydney, suggesting a reduction of sea- and tree-change migration, particularly outside the two-hour commute.

In Victoria, Melbourne property values rose by 0.1% in February, stopping the decline of growth that occurred from the back end of 2023, according to Matt Skehan, Azure Buyers Agents.

The Victorian market has navigated numerous headwinds over the past few years but has remained remarkably resilient and appears ready to rebound as consumer confidence improves and interest rates decline.

The rental market is extremely tight with a current vacancy rate of 1% and rental rates have increased 10.8% over the past 12 months, the second highest gain in the country over this period.

In Queensland, property values across the state reached a new peak at the end of February 2024, with Brisbane values increasing 53.5% since March 2020 and regional markets increasing 54.4% throughout the same period, according to Melinda Jennison, Managing Director, Streamline Property Buyers.

The rental market is tight across most of Queensland with vacancy rates at or near record lows, putting upward pressure on rents as Queensland’s population continues to surge.

Despite uncertainties, Brisbane and Queensland show ongoing price growth pressure based on their underlying fundamentals, albeit the rate of growth is expected to be more moderate than 2023’s surge.

In South Australia, Adelaide’s medium- to long-term performance has been stellar, with the city being the best performing capital city in Australia since the onset of COVID to February 2024, according to Peter Koulizos, Lecturer, Master of Property, The University of Adelaide.
Koulizos predicts that within two years, Adelaide’s median dwelling values will be higher than Melbourne’s median dwelling values.

In Tasmania, with a median house price of $750,000, which is 110% lower than Sydney’s median price, housing prices in Hobart are among the most affordable in the country, according to Dr Kevin Hoang, Economist and Head of Research, inSynergy Advisory.
The Tasmanian government has put forward a bold plan to accelerate infrastructure investment worth over $27 billion over the next 10 years, but the city is also facing challenges such as an ageing population, a small and less diversified economy, and the lowest population growth rate in the country.

In the ACT, vendors have brought homes to market which has spiked supply in the first quarter, alongside investors selling up, according to Claire Corby, Buyers’ Agent, Capital Buyers Agency.

With interest rates seemingly levelled, Canberrans are feeling confident in their repayment calculators and are bidding up a storm, but only select homes are in strong demand.

In Western Australia, the Perth market has passed its peak in terms of market activity, although the price data remains strong, according to Terry Ryder, Director, Hotspotting.
Other parts of WA have better prospects, including regional centres like Bunbury, Mandurah, and Geraldton, which recently featured in Hotspotting’s National Top 10 Positive Cash Flow Hotspots research.