As the new year begins, many Australians are reflecting on the housing market’s performance in 2024 and wondering what lies ahead for 2025. Recent data offers valuable insights into the trends shaping the home property landscape and potential opportunities for the year to come.
New data from CoreLogic has unveiled a notable shift in the Australian housing market, with home values declining by 0.1% in December 2024. This marks the first drop in nearly two years, signaling potential changes ahead for homeowners and buyers alike.
The CoreLogic Hedonic Home Value Index (HVI), which tracks residential property values using recent sales and property attributes, attributes this decline to several factors, including rising interest rates, cost-of-living challenges, and reduced borrowing capacities. Despite this slight year-end dip, Australian home values still grew by 4.9% overall in 2024, adding approximately $38,000 to the median home value.
A Year of Contrasts in Growth
The year 2024 showcased a tale of two halves for the housing market. During the first six months, home values surged by 4.1%, driven by strong demand and market confidence. However, this momentum slowed significantly in the latter half of the year, with growth tapering to just 0.7%. Moreover, the slowdown became more pronounced towards the year’s end, as the index plateaued in November and recorded a slight drop in December. By the close of the year, the median value of Australian residential property stood at $814,837.
Affordable Markets Outshine Premium Segments
Interestingly, affordable housing markets proved to be more resilient in 2024. For instance, properties in the lower quartile—often more accessible for first-time buyers—saw a remarkable 9.8% increase in value over the year. In contrast, the upper quartile experienced modest growth of just 1.5%, highlighting the impact of economic pressures on premium markets.
Capital Cities vs. Regional Areas
When breaking down performance by region, combined capital city markets saw a 4.5% rise in home values throughout the year. On the other hand, regional markets outperformed their urban counterparts, achieving a 6.0% increase. This trend underscores the growing appeal of regional living, likely fueled by affordability, lifestyle changes, and remote work flexibility.
What Does This Mean for 2025?
The December dip raises questions about what the future holds for the Australian housing market. With interest rates and economic conditions continuing to influence borrowing capacity, the market may face additional challenges. Nevertheless, the resilience of affordable markets and regional areas suggests opportunities for buyers and investors willing to adapt to changing conditions.
As the market navigates these shifts, staying informed about trends and opportunities will be essential for anyone looking to buy, sell, or invest in the year ahead.
If you have questions about the housing market or need advice on your property journey, contact us today. Our team is here to help you navigate the opportunities and challenges in 2025.