Property market shows divergent trends across Australian cities
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The Australian property market has displayed significant variation in performance across major cities in the first half of 2024, according to a new report from the Real Estate Buyers Agents Association of Australia (REBAA).
Perth, Adelaide and Brisbane have maintained their positions as market leaders in dwelling price growth since the pandemic began.
REBAA President Melinda Jennison said other capital cities experienced relatively flat market conditions over the past six months.
“Across the country, the more affordable end of the market continues to outperform the higher-priced properties in terms of price growth, aligning with the trend of stronger monthly growth in the unit market compared to the house market,” Ms Jennison said.
She noted that while national property values are still rising month-on-month, the rate of growth is slowing down.
Ms Jennison attributed this deceleration to persistent inflation, delays in anticipated interest rate cuts, and concerns about rates potentially staying higher for longer.
Despite these challenges, she said the new Stage 3 tax cuts are expected to boost disposable incomes and borrowing capacities for many households.
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“This could potentially increase housing demand and strengthen prices further,” Ms Jennison said.
The report highlighted that national property listings remain about 17% below the previous five-year average, though advertised supply has gradually increased since March.
Ms Jennison pointed out that per capita building completions and approvals are currently at historic low levels, despite hopes for increased housing supply due to the Federal Government’s National Housing Accord.
“The price discrepancy between existing and new properties presents a challenge for new developments, with construction costs in many areas exceeding the selling prices of existing homes,” she said.
While mortgage arrears are rising according to the latest APRA data, they remain slightly lower than pre-COVID levels.
Ms Jennison expects the outlook for the Australian property market to remain patchy, with regional variations in price growth performance based on localised supply and demand metrics.
In New South Wales, REBAA NSW State Representative Linda Johnson reported that Sydney’s property market has stabilised, with median prices levelling off.
She noted that suburban and regional areas continue to attract buyers seeking lifestyle changes and remote work opportunities.
Victoria has seen steady growth, with Melbourne’s median house price rising by approximately 3% year-on-year to around $780,000, according to REBAA Victoria State Representative Luke Assigal.
In Queensland, Brisbane’s supply issue has persisted for several years, with advertised properties 34% below the five-year average.
Ms Jennison said Brisbane’s median house prices have soared ahead of Melbourne with 6.5% growth in the past six months, making it the third most expensive capital city house market in Australia.