July 15, 2024


The Intersection of Information and Insight

Five property market trends for 2024

7 min read

Key takeaways

The outlook for the property market in 2024 will be shaped by various push-pull factors at play between a supply shortfall, strong population growth and interest rates remaining higher for longer.

By the end of 2024, combined capital house and unit prices are forecasted to be at a record high, with Sydney, Brisbane, Adelaide and Perth houses expected to set record prices, and Sydney, Brisbane and Adelaide units also anticipated to achieve record high.

This year surprised everyone in the property market – the rising property prices defied the rising interest rates; winter became the new spring selling season, and we experienced the “cliffhanger” rather than the fixed-rate mortgage cliff.

As of mid-November, the combined capital median house price ($1,084,855) and regional median house price ($591,139) reached a peak along with Brisbane ($865,072), Adelaide ($862,078) and Perth ($724,033) median house prices. Sydney’s median house price ($1,583,521) is only 0.4% away from the peak while Melbourne’s ($1,049,038) is 4.1% away.

What’s ahead for our property markets in 2024?

Well, according to Domain’s 2023 End-Of-Year Wrap and 2024 Outlook report, continued growth in house and unit prices is anticipated.

Dr Nicola Powell, Domain’s Chief of Research and Economics, said:

“Some buyers, sellers, and renters proactively adapting to the lingering impact of the 2023 market movements and potential changes in the coming year.”

House and unit price forecasts for 2024.

Location House Unit
Sydney 7–9% 3—5%
Melbourne 2—4% 3—4%
Brisbane 7—8% 4—6%
Perth 6—7% 1—2%
Adelaide 7—8% 2—3%
Canberra 3—5% 2—3%
Hobart 2—4% +/-1%
Gold Coast 6—7% 4—5%
Sunshine Coast 4—6% 1—2%
Regional NSW 2—5% 2—3%
Regional Vic 2—4% 1—3%
Regional Qld 2—5% 1—2%
Capitals 6—8% 2—3%
Regionals 2—4% 1—3%
Australia 5—7% 2—4%

Domain’s report also highlighted trends that we can expect for the next year.

Here are these five trends:

Five trends for the property markets this 2024

#1 An interest rate cut will spark demand.

According to Domain, stretched affordability and lower borrowing power will continue to place a ceiling on buyers’ capacity to pay for a home.

Dr Powell further said:

“We could see measures that improve this outlook for buyers in 2024. A cut in interest rates or other stimulus measures will spark demand and create another price upswing – a prospect likely to come to fruition in the latter part of 2024.

An alternative to a rate cut would be an easing of the mortgage serviceability buffer.

It would inevitably speed up access to the property market for many by lifting borrowing capacity and/or improving the cost of holding debt, increasing demand and resulting in swift upward price pressures on the housing market.”

#2 The flight to affordability.

Urban spread and gentrification will be on the rise as more people chase affordability.

Buyers will explore bridesmaid suburbs and areas they initially overlooked.

The flight to affordability for first-home buyers will be ignited by the federal government’s ‘Help to Buy’ – a shared equity scheme of up to 40% of a home.

The four-year program is likely to commence in 2024.

Access will be restricted to residents in states that have enacted legislation endorsing the program – all have agreed to pass legislation, which should happen early next year.

This will support demand for affordable homes, especially units, in larger capitals. We will also see generational inheritance rise as Baby Boomers consider early inheritance (and perhaps even skipping a generation to help grandchildren), influencing buying capacities and choices.

Policies aimed at making the homeownership dream a reality will exacerbate the stress on the housing supply as more buyers compete for the same number of properties.

#3 YIMBYs will replace NIMBYs.

According to Domain’s report, it will be the year of progressive housing and planning reforms nationally in 2024, with the not-in-my-backyard folk swinging to yes-in-my-backyard.

Dr Powell commented:

“We will see a visionary attitude towards housing development and affordability that takes a radical approach to enable urban densification in areas where people want to live.

This could involve tweaking planning powers away from local governments to avoid decision-making sway from NIMBYism, placing us on a path that shapes our cities for the future and our changing demographics rather than planning for the Australia of yesterday and today.

The federal government’s effort to address housing affordability and facilitate greater entry for first-home buyers into the property market is expected to generate substantial activity.”

Population 2

#4 Population-driven housing demand.

Strong population growth is set to remain a feature of the housing market.

Dr Powell further commented:

“We believe that net overseas migration has peaked and is forecast to return to normal patterns by 2025.

The recent temporary record strength in migration will continue influencing our housing markets.

Domain analysis found population growth has a cumulative longer-term effect on house prices and, therefore, will continue to play a driving role in our housing markets into 2024 and beyond.

Together with a perilous rental market, it makes purchasing more attractive and may shift some to buy, given the current challenges of securing a lease.”

#5 Rental markets reach a tipping point.

Australia’s rental market is playing a much larger role in our housing market than we have been used to – increasingly more of us are renting, and for longer.

This will continue to play out in 2024.

However, a tipping point will be reached at some stage, rent growth will slow, and some sub-markets will operate with a more balanced rental market.

This will be driven by stretched affordability.

More renters opting for house shares and first-home buyer incentives will help transition some to being owners or fast-track others to a more affordable purchase.

As mortgage stress weighs in, cashed-up buyers will benefit from landlords divesting early in 2024.

Wrapping up 2023

According to Domain, Australia’s property market in 2023 will be defined as the year price growth defied high-interest rates and a new cycle began.

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