Key takeaways
Property prices rose 5.5% nationally, reflecting a shift to more sustainable growth compared to the higher 6.9% increase in 2023.
Buyers enjoyed more time and options, with median days on the market increasing from 27 to 34 days, while sellers benefited from renewed confidence.
Many leveraged existing property equity to upgrade homes, while others, particularly in Victoria, sold investment properties due to financial pressures like land tax changes.
Australia’s population grew 2.3%, with net overseas migration contributing 83%. This influx intensified housing demand, especially in major cities.
High costs for labour and materials limited new housing supply, with developers prioritizing high-value projects targeting wealthier buyers. Affordable housing projects were scarce, exacerbating supply constraints and affordability issues amid a growing population.
What made 2024 a standout year for Australia’s property market?
Well, in 2024, it proved once again that resilience and adaptability are the market’s defining traits.
After grappling with the effects of rising interest rates and economic uncertainty, the year saw buyers and sellers return to the market, with property prices stabilizing and new trends emerging.
Let’s unpack the key developments.
The year of balanced recovery
According to PropTrack, in 2024, national property prices rose by 5.5%.
While this wasn’t as impressive as 2023’s 6.9% growth, it marked a return to more sustainable and balanced conditions.
Karen Dellow, Senior Audience Analyst at PropTrack, described it best:
“We saw a shift toward a more balanced market.
Increased activity from both buyers and sellers created better conditions overall, giving buyers more time and choice while sellers benefited from improved confidence.”
Meanwhile, new property listings jumped 9% compared to 2023, with sellers capitalizing on improved conditions and buyers taking advantage of the greater selection.
Interestingly, the median number of days properties stayed on the market increased by 26%, from 27 days in 2023 to 34 days in 2024.
This reflects a slower pace, giving buyers room to breathe and make a more informed decision.
A tale of two markets: winners and losers
The recovery story varied significantly across Australia’s capital cities.
PropTrack’s data show that some markets surged ahead, while others faced challenges:
- Cities on the Rise:
Adelaide, Hobart, Darwin, and Canberra recorded stronger price growth than in 2023. These cities benefited from steady demand and a mix of affordability and lifestyle appeal. - Mixed Results for Big Markets:
Sydney and Brisbane experienced slower growth compared to the previous year but still performed well overall. Brisbane and Perth stood out with double-digit growth, maintaining their reputation as investor favourites. - Melbourne’s Struggles:
The Victorian capital was the outlier, with prices declining throughout 2024. High costs of living, changes to land tax policy, and weaker demand weighed heavily on Melbourne’s market.
Despite Melbourne’s price drop, sellers remained active, leading to a 14% increase in new listings, a trend mirrored in Sydney, which also saw listings jump 14%.
This contrasts with smaller markets like Darwin and Hobart, where new listings dropped slightly.
What fuelled the market in 2024?
According to Dellow, the property market’s recovery wasn’t purely organic, it was driven by several key factors:
- Homeowner Equity and Upgrades:
Many homeowners took advantage of the equity they had built in their properties, using it as a springboard to upgrade to bigger or better homes. However, high interest rates also pushed some to offload investment properties, particularly in Victoria, where land tax changes added to financial pressures. - Population Growth:
Australia’s population surged by 2.3% in the year leading to March 2024, with 615,000 new residents. Net overseas migration accounted for 83% of this growth, fuelling housing demand, especially in major cities.
She further highlighted:
“Rapid population growth, particularly from overseas migration, has amplified the demand for housing.
But with supply still constrained, affordability pressures remain a key challenge.”
The construction industry’s struggles
If there was one sector that struggled to keep pace, it was construction.
High labour and material costs meant developers focused on high-value projects targeting affluent buyers, such as downsizers and young professionals.
This means that affordable housing projects remained scarce, and many developments were confined to outer suburbs.
With pre-sale targets hard to meet and financing challenges lingering, the new housing supply remained constrained, further exacerbating affordability issues in a growing population.
The outlook for 2025
- Moderate Price Growth:
PropTrack forecasts price growth will slow compared to 2024. Adelaide, Brisbane, and Perth are expected to lead, with gains of 5% to 6%, while Melbourne may struggle with growth ranging from -1% to 2%.
- Election Impact:
The federal election, scheduled for later in the year, is expected to temper market activity, as buyers and sellers adopt a wait-and-see approach. Housing policy announcements could influence demand and spark market shifts. - Interest Rate Cuts on the Horizon:
While many hoped for rate cuts in 2024, they didn’t materialize. Now, expectations have shifted to April 2025. A reduction in rates could boost borrowing capacity, ease the financial strain on households, and reignite market activity.
Karen Dellow adds:
“The property market is poised for a year of recalibration in 2025.
While interest rate cuts could provide relief, sustained population growth and constrained supply will remain dominant factors shaping the market.”
