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July 10, 2024 by ash

A new report reveals the latest forecasts for property prices in 2024. Where do we stand with our housing markets in the next couple of years?

Key takeaways

The Australian housing market is currently so undersupplied that I have rarely seen a supply-demand inflection point like this. It’s only going to get worse.

There are a number of unknowns and risks ahead for our housing markets, but there are also five certainties:
1. RBA expects inflation to persist for a little while longer
2. There will be a decline in interest rates
3. Rental and purchase housing will remain scarce for some time to come.
4. There will be an increase in rents
5. Housing demand will continue to be fuelled by the impressive demographics and strong population growth.

In this way, there is a window of opportunity before falling interest rates result in a resetting of the property market.

There is little doubt that inflation and interest rates have peaked, and in due course consumer confidence will return and the markets will resume their upward trajectory.

In 2024, watch out for these trends:-
1. There will be a continuation of the recovery phase of the property market cycle.
2. Rates will eventually fall, but this may not happen until later this year or early next year.
3. There will be more fragmentation in our property markets.
4. Immigration will continue to underpin our housing markets.
5. There will be a continuing rise in rents.

6. Property market investments will continue to be made by strategic investors.
7. The importance of living in the right neighbourhood will increase.
8. There will be growth in employment and a robust economy.

  • How do you see the Australian property market for the rest of 2024? 
  • Is the RBA going to raise rates again in 2024 or have interest rates peaked now?
  • In 2024, will affordability issues result in distressed sales and falling prices or even a property market crash? 

After 13 months of rising values in the housing market, people are asking these questions.

Our housing market has defied the many doomsday forecasts and entered a V-shaped recovery early in 2023, making the 2022 downturn one of the sharpest and shortest on record.

With home prices hitting fresh record highs in many markets, the price upturn has now been entrenched for 15 months.

During this period, auction clearance rates are consistently showing the depth of our major capital city housing markets, and FOMO (fear of missing out) is creeping in as house prices reach new peaks.

Consumer sentiment and auction results have historically shown a strong correlation with future housing prices.

Each state is at its own stage of the property cycle, and each capital city has multiple markets.

While some regional areas outperformed the capital cities in 2022, capital city property markets have led the price upturn in 2023 and regional areas had slower growth.

Overall, persistently low supply relative to demand are supporting arising housing values despite high interest rates, ongoing cost of living pressures, worsening affordability pressures and a deeply pessimistic level of consumer confidence.

And after underperforming throughout the pandemic period, unit prices recorded stronger growth for much of 2023 and are still growing strongly this year as affordability constraints will mean more Australians trade backyards for balconies and courtyards.

Here’s what the big four banks forecasting for property prices in 2024

  • According to ANZ, capital city housing prices will rise by 6-7% in 2024, 5-6% in 2025, and around 5% in 2026. As a result of a longer-running shortage of available homes, Brisbane, Perth, and Adelaide are likely to outperform other cities. Household incomes are expected to rise (first due to fiscal policy) from late 2024 onward.
  • According to ANZ, capital city housing prices will rise by 6-7% in 2024, 5-6% in 2025, and around 5% in 2026. As a result of a longer-running shortage of available homes, Brisbane, Perth, and Adelaide are likely to outperform other cities. Household incomes are expected to rise (first due to fiscal policy) from late 2024 onward.
  • CBA expects capital city prices to rise by 5 percent, with small variations across cities. According to forecasts, Brisbane will grow by 6%, Melbourne and Perth by 5%, Sydney by 4%, and Adelaide by 1%.
  • According to NAB, prices will rise by an average of 5.4% across the capitals. Brisbane prices are expected to rise by 6.5 percent, Perth and Adelaide prices will rise by 6.2 percent, Melbourne prices will rise by 5.5 percent, and Sydney prices will rise by 5 percent. Values in Hobart are expected to remain flat for the remainder of the year.
  • According to Westpac, the combined capitals will grow by 6 percent. According to forecasts, Perth will grow by 10 percent, followed by Brisbane at 8 percent, Sydney at 6 percent, Adelaide at 4 percent, and Melbourne at 3 percent

There is always a way to beat the averages.

Although there’s a likelihood that property prices will grow a little more slowly in 2024 than they did last year, the good news is that investing in the right property in the right location can always beat the national average.

The next hotspot isn’t what I mean by that.

In other words, I mean buying quality properties in gentrifying suburbs that will outperform over time.

With property, you can increase your results by using your own time, skills, and knowledge – so don’t settle for average.

There’s more to it than just location. It is possible to add value to a property by renovating or redeveloping it.

In three years, Oxford Economics forecasts the following house price levels.

How can values continue rising amid high interest rates?

Clearly affordability has decreased, but the housing markets are being underpinned by a number of factors:

  • Wealthy buyers entering the market with higher deposits.
  • Downsizers who had a lot of equity in their homes are buying debt free – in fact a third of properties last year were transacted with no mortgage at all.
  • The bank of mum and dad and inheritances are helping many buyers with a deposit.
  • Some buyers are buying in cheaper markets while others are buying units rather than houses.
  • The property room of 2020-21 left many homeowners with significant equity in their homes.

The latest housing market stats

Dwelling values have remained robust as CoreLogic’s national Home Value Index rose 0.6% in February, the strongest monthly gain since October last year.

Here are the latest stats provided by CoreLogic for property price changes around Australia:

As a matter of fact, all research houses reported higher dwelling prices in March 2024:

  • Home values in Australia continued to rise in May, with CoreLogic’s national Home Value Index (HVI) rising 0.8%, the biggest monthly gain since October last year and the 16th consecutive month of growth.
  • In May, PropTrack reported that national home prices rose 0.3%. They have now risen 6.68 % from May 2023 levels and 9.5 % from December 2022 levels.
  • According to Dr Andrew Wilson’s My Housing Market, national housing markets recorded steady price growth in May, with the late autumn selling season generally providing positive outcomes for most sellers. In the May quarter, the median house price in the national capital city increased by 0.3% to $1,134,494.

A good leading indicator for the property market is “Asking Prices”, which reflect seller sentiment and expectations for the future value of their home.

Australian property prices: the fundamentals

There are a variety of factors that influence property prices, and as we move through property cycles, they all come into play.

Property values will be driven by a number of factors that tend to boil down to two basic economic concepts: consumer confidence and supply and demand.

It is crucial for one to understand how these concepts work together to affect real estate in the future.

Conversely, if we take a telescopic view rather than a microscopic view of housing over the next decade or two, we will see that demographics (how many of us there are, what we want to live, where we want to live) and wealth will be the two biggest factors driving housing markets.

To begin with, let’s explore some of the key underlying factors that will influence our property markets in the medium term.


In spite of many people believing that interest rates are a key driver of property values, and that’s why so many pessimistic property forecasts were issued during the rise in interest rates during 2022-23, our housing markets proved extremely resilient and continued to grow despite 13 interest rate hikes from the RBA.

The fall in interest rates and the subsequent increase in affordability are certainly powerful drivers of property price growth, but the reverse is not true.

In addition to interest rates, many other factors influence house prices.

Earlier this year, Australia’s largest lender, the Commonwealth Bank, predicted six interest rate cuts in 2024 and 25 starting in September, but it appears rates will stay high for a longer period of time as inflation remains stubbornly high and our economy and labour markets continue to perform better than the Reserve Bank would like.

In 2024, economists are divided about the timing and number of RBA rate cuts. Some predict three, while others predict none.

For borrowers who have large debts compared to their incomes, the difference between no rate cuts, and up to three rate cuts, can be a huge factor.


In the short term, housing supply affects house prices greatly: an undersupply causes prices to rise, while an oversupply causes them to fall.

Our lack of new housing construction has led to low vacancy rates and higher house prices despite very strong population growth through 2023.

The strong absorption of new listings for sale has suppressed the total number of listings in the market, intensifying competition among buyers.

A shortage of housing has resulted, outweighing the negative impact of rates on prices.

And there is no end in sight as building approvals (which are a good indication of future supply) are running at very low levels.

And just because a new apartment complex has been approved, it doesn’t mean it will get built.

At the moment very few new complexes are coming out of the ground because it’s not financially viable to build them at today’s market prices.

Of course, this means future new developments will have to sell at prices considerably higher than today’s market value and this will, in turn, pull up the value of established apartments.


Consumer confidence is a critical factor affecting the direction of property prices.

We won’t make big financial decisions like moving home or buying an investment property unless we feel confident about our economic future and our financial stability.

2023 was a year where consumer confidence was at historic lows because of all the economic and socio-political issues that confronted us.

I believe that during 2024 consumer confidence will rise as inflation slowly comes under control and we realise interest rates have peaked and are going to eventually fall.

At the same time, the “wealth effect” a very improving economy and rising property values will lead to further consumer confidence and bring home buyers and sellers back into the market.


Another key factor that affects the value of the property market is the overall health of the economy.

This is generally measured by economic indicators such as the gross domestic product (GDP), employment data, manufacturing activity, the prices of goods, etc.

Broadly speaking, the economy is strong and the RBA is trying to slow it down to bring inflation under control, but currently, everybody who wants a job can get a job and this will underpin our housing markets even if the economy falters a little moving forward.


Australia has experienced a record-breaking rate of net overseas migration, estimated to have reached around 500,000 people in the 12 months to September 2023.

While population growth has always been a key driver supporting our property markets, the influx has pushed our supply/demand balance off-kilter and is key to the increase in housing prices and the shortage of rental properties.


When the credit (the ability to borrow from the banks) is readily accessible, with lower interest rates and less stringent lending criteria, it tends to stimulate the housing market since more people find themselves able to borrow money to buy homes, leading to increased demand for housing.

On the flip side, when credit is tightened through higher interest rates or stricter lending criteria (as happened when APRA made the banks tighten the purse strings in 2016-7), the effect can be a cooling of the housing market.

Such measures are usually a deliberate policy response to an overheated market, aiming to reduce the risk of a “property bubble” and subsequent crash.


This sentiment, essentially the collective attitude and outlook of investors towards property markets, can significantly influence both the demand for and the value of real estate.

Investors generally account for around one-third of all property transactions so positive investor sentiment can drive up property prices, especially in sought-after areas.

Conversely, negative investor sentiment, as occurred during the market downturn of 2022, can lead to a decrease in property values.

If investors believe that property prices will stagnate or fall, they may be less inclined to invest, or they might choose to sell off their properties, increasing supply in the market.


Government incentives can have both direct and indirect impacts on the real estate sector.

One of the most direct ways government incentives affect property values is through policies aimed at stimulating demand.

For instance, initiatives like the First Home Owner Grant (FHOG) or stamp duty concessions for first-time buyers directly increase buying capacity, leading to greater demand for property.

Another aspect is the development incentives provided by the government to promote specific types of property development, such as high-density housing or urban renewal projects.

These incentives can increase property values in targeted areas by improving infrastructure, accessibility, and community facilities, making them more desirable places to live.

Tax policies and regulations also play a crucial role.

Negative gearing can increase demand for investment properties, pushing up prices.

And every time there is talk about removing negative gearing or amending taxes including land tax, investors shy away from our housing markets.