Australia’s housing market has experienced its first monthly decline in nearly two years, with national home prices dipping by 0.1 per cent in December 2024.
This downturn is largely attributed to elevated mortgage rates and an increased number of property listings.
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Major cities such as Sydney and Melbourne have been significant contributors to this national decline, recording decreases of 0.6 per cent and 0.7 per cent, respectively, in December, while smaller capitals like Brisbane, Perth, and Adelaide continued to exhibit growth during the same period.
CoreLogic’s Tim Lawless said affordability has become significantly more challenging.
“Home loan borrowing capacity has come right down amid high interest rates,” he said.
Despite the recent slowdown, the annual data reflects a 4.9 per cent increase in property values over 2024, equating to an approximate addition of A$38,000 to the median home value.
According to the Reserve Bank of Australia (RBA), interest rates have remained at a 12-year high of 4.35 per cent.
Looking ahead, analysts anticipate that home-price growth will decelerate in early 2025, potentially offering a window of opportunity for prospective buyers. However, Sydney and Melbourne may experience weaker price growth or even declines due to rising supply and affordability constraints.
The RBA has also indicated the possibility of interest rate cuts in 2025, which could further influence market dynamics.
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