Property affordability shapes Australian housing market performance in 2024
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Housing affordability emerged as the dominant factor driving property market performance across Australian capital cities in 2024, according to a new report from the Real Estate Buyers Agents Association of Australia (REBAA).
High interest rates continued to impact borrowing capacity throughout the year, influencing buyer behavior and market dynamics.
REBAA President Melinda Jennison said affordability challenges and construction costs shaped buyer demand patterns.
“Widespread affordability challenges, rising construction costs, as well as a higher proportion of investors and first home buyers have also driven stronger demand in these lower-value market tiers,” Ms Jennison said.
Population growth and limited housing supply helped maintain property prices despite record-high debt servicing ratios.
Sydney and Melbourne experienced subdued conditions, with Melbourne recording a slight decline in dwelling values over the year.
Brisbane, Adelaide and Perth emerged as the strongest performing capital cities.
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“These cities benefitted from a combination of affordability, strong demand, and low inventory levels,” Ms Jennison said.
Property listings in Sydney and Melbourne exceeded five-year averages, while Brisbane, Adelaide and Perth maintained stock levels more than 20% below average.
New South Wales saw distinct trends between metropolitan and regional markets, according to REBAA NSW Representative Linda Johnson.
“Sydney, the heart of NSW’s real estate market, remains a key player in the metro scene,” Ms Johnson said.
Victoria’s market faced unique pressures, with a 28.4% rise in distressed property listings – the highest in Australia.
Queensland demonstrated resilience despite economic uncertainty, buoyed by interstate migration and strong rental demand.
South Australia started 2024 strongly but showed signs of softening by spring, while Tasmania maintained relative stability.
Western Australia continued to outperform other capital cities, though growth began moderating.
The ACT market displayed characteristic stability, with only modest price movements through the year.
Looking ahead, potential interest rate cuts in 2025 could boost buyer confidence, though market performance is expected to vary significantly between regions.