Housing Market Insights: Forecasting Australia's House Rates for 2024 and 2025

A recent report by Domain predicts that real estate rates in different regions of the country, especially in Perth, Adelaide, Brisbane, and Sydney, are anticipated to see considerable increases in the upcoming monetary

Throughout the combined capitals, house prices are tipped to increase by 4 to 7 percent, while system costs are anticipated to grow by 3 to 5 percent.

By the end of the 2025 financial year, the typical home price will have gone beyond $1.7 million in Sydney and $800,000 in Perth, according to the Domain Projection Report. Adelaide and Brisbane will be on the cusp of cracking the $1 million typical home rate, if they haven't already strike seven figures.

The housing market in the Gold Coast is anticipated to reach new highs, with rates forecasted to increase by 3 to 6 percent, while the Sunlight Coast is expected to see a rise of 2 to 5 percent. Dr. Nicola Powell, the primary economist at Domain, kept in mind that the expected development rates are relatively moderate in the majority of cities compared to previous strong upward trends. She pointed out that costs are still increasing, albeit at a slower than in the previous financial. The cities of Perth and Adelaide are exceptions to this pattern, with Adelaide halted, and Perth showing no indications of slowing down.

Rental costs for apartments are anticipated to increase in the next year, reaching all-time highs in Sydney, Brisbane, Adelaide, Perth, the Gold Coast, and the Sunshine Coast.

According to Powell, there will be a basic price increase of 3 to 5 per cent in local systems, suggesting a shift towards more economical residential or commercial property alternatives for buyers.
Melbourne's home market stays an outlier, with expected moderate yearly growth of as much as 2 per cent for homes. This will leave the median home rate at between $1.03 million and $1.05 million, marking the slowest and most irregular recovery in the city's history.

The 2022-2023 recession in Melbourne covered 5 consecutive quarters, with the average home price falling 6.3 per cent or $69,209. Even with the upper projection of 2 per cent growth, Melbourne home rates will only be simply under midway into healing, Powell stated.
Home costs in Canberra are prepared for to continue recovering, with a forecasted moderate development ranging from 0 to 4 percent.

"The nation's capital has actually had a hard time to move into a recognized recovery and will follow a likewise sluggish trajectory," Powell said.

The projection of impending rate hikes spells problem for potential homebuyers struggling to scrape together a down payment.

According to Powell, the ramifications differ depending upon the type of buyer. For existing homeowners, delaying a decision might lead to increased equity as rates are projected to climb. In contrast, first-time buyers might need to set aside more funds. Meanwhile, Australia's housing market is still having a hard time due to cost and payment capability issues, worsened by the continuous cost-of-living crisis and high interest rates.

The Reserve Bank of Australia has kept the official cash rate at a decade-high of 4.35 percent given that late in 2015.

According to the Domain report, the restricted schedule of brand-new homes will stay the primary element influencing property values in the near future. This is due to an extended scarcity of buildable land, slow building and construction license issuance, and raised building expenses, which have restricted real estate supply for a prolonged duration.

In rather positive news for potential purchasers, the stage 3 tax cuts will deliver more money to families, raising borrowing capacity and, for that reason, purchasing power across the country.

According to Powell, the housing market in Australia may get an extra increase, although this might be counterbalanced by a decrease in the acquiring power of customers, as the cost of living increases at a much faster rate than wages. Powell cautioned that if wage growth remains stagnant, it will cause an ongoing struggle for affordability and a subsequent decline in demand.

In local Australia, house and unit rates are anticipated to grow moderately over the next 12 months, although the outlook varies between states.

"At the same time, a growing population propped up by strong migration continues to be the wind in the sail of home cost growth," Powell stated.

The revamp of the migration system might trigger a decrease in regional property need, as the new knowledgeable visa path eliminates the requirement for migrants to reside in local areas for 2 to 3 years upon arrival. As a result, an even larger percentage of migrants are most likely to converge on cities in pursuit of superior job opportunity, subsequently lowering demand in local markets, according to Powell.

According to her, far-flung regions adjacent to city centers would keep their appeal for people who can no longer pay for to reside in the city, and would likely experience a surge in appeal as a result.