December 1, 2023
The Australian housing market has been a source of much discussion and debate in recent years. In 2023, the market took an unexpected turn, with prices defying predictions and rising despite rising interest rates. This article delves into the factors that contributed to this trend and explores the outlook for the market in 2024.
2023: A Year of Surprises
Entering 2023, many experts predicted that rising interest rates would lead to a downturn in the housing market. However, this did not materialize. Instead, prices continued to rise, albeit at a slower pace than in 2021 and 2022.
Several factors contributed to this unexpected resilience. One factor was the ongoing undersupply of housing in Australia. This undersupply has been exacerbated by a number of factors, including population growth, a decline in new housing construction, and an increase in investor demand. Also Read: 5 Reasons To Buy a Property Now! Interest Rate Hike in Australia!
Another factor was the strong labor market. Unemployment remained low throughout 2023, and wages grew at a steady pace. This gave many Australians the confidence to take on larger mortgages.
Finally, government support measures, such as the HomeBuilder scheme, also played a role in supporting the market.
What’s Next for 2024?
The outlook for the Australian housing market in 2024 is uncertain. On the one hand, the factors that supported the market in 2023 are still in place. Population growth is expected to continue, and the labor market is likely to remain strong. Deanside: The Hidden Gem of Melbourne’s Western Suburbs
On the other hand, there are also some headwinds facing the market. Interest rates are expected to continue to rise, and affordability is becoming a growing concern.
| How much further do prices need to recover? | ||||
| Location | Houses | Units | ||
| Area | Median | From peak | Median | From peak |
| Sydney | $1,583,521 | -0.4% | $783,546 | -2.7% |
| Melbourne | $1,049,038 | -4.1% | $568,417 | -5.5% |
| Brisbane | $865,072 | At peak | $511,476 | At peak |
| Adelaide | $862,078 | At peak | $464,783 | -0.3% |
| Canberra | $1,050,575 | -10.6% | $554,266 | -9.1% |
| Perth | $724,033 | At peak | $380,435 | -9.9% |
| Hobart | $712,062 | -6.8% | $495,380 | -12.8% |
| Darwin | $649,538 | -4.3% | $382,403 | -21.4% |
| Capitals | $1,084,855 | At peak | $624,290 | -0.5% |
| Regionals | $591,139 | At peak | $455,884 | -0.3% |
Overall, the Australian housing market is likely to remain subdued in 2024. However, there is still potential for price growth in some areas, particularly those with strong demand and limited supply.
Key Trends to Watch in 2024:
- The impact of rising interest rates on affordability
- The level of population growth
- The supply of new housing
- Government policy measures
Wrapping Up
The Australian housing market is a complex and ever-changing landscape. It is important to stay informed about the latest trends and developments in order to make informed decisions about your property investments.
