Australia's housing market recorded its first monthly decline in almost two years in December 2024, as higher mortgage rates and increased listings put pressure on prices.
CoreLogic's latest data revealed a modest 0.1% dip in national home values from November, with major capitals experiencing a sharper fall of 0.2%. Sydney and Melbourne led the decline, shedding 0.6% and 0.7%, respectively, while Brisbane, Perth and Adelaide continued to register gains.
Tim Lawless, CoreLogic’s research director, highlighted a broader trend of softening growth in the latter half of the year.
“Growth in housing values has been consistently weakening as affordability constraints weighed on buyer demand and advertised supply levels trended higher,” Lawless said.
Despite the December decline, Australian property values rose 4.9% over the year, adding around $38,000 to the median home price. Sydney’s median home value now stands at $1.2 million.
Household wealth also saw a boost, with the government statistician reporting an $851 billion increase in the total value of land and housing over the year to September, taking the aggregate to a record $11.3 trillion.
The Reserve Bank of Australia (RBA) raised interest rates to a 12-year high of 4.35% in 2023 but has since signalled a potential easing. Analysts predict rates could fall to 3.60% by 2025, though Lawless warned that significant rate cuts are unlikely to drive a fresh surge in property values.
A Reuters poll anticipates home prices to climb around 5% annually in 2025 and 2026, buoyed by population growth and limited new housing supply.