Australia’s capital city housing markets are expected to see continued growth in 2024, with prices forecast to rise by 7.3 per cent.
However, the latest ANZ Research predicts a slowdown in 2025, with prices expected to increase by 5.5 per cent.
The reports said that while these figures represent solid growth overall, they are also cooling from the rapid rises seen in the past few years.
“The national housing market is cooling, with auction clearance rates down and the median time on the market increasing,” the report said.
Perth’s housing market continues to lead the pack, with prices up 18 per cent year-to-date and forecast to post a 25.1 per cent increase by year-end.
Brisbane and Adelaide are both expected to end the year with double-digit gains, around 15 per cent each.
Melbourne, however, is forecast to record a 1.7 per cent drop in prices this year, making it one of the few capital cities where values are falling.
Hobart is also expected to see prices fall, contributing to a more subdued outlook for the southern states.
Despite the strong overall forecast, momentum is clearly slowing.
In 2025, capital city housing prices are expected to grow by 5.5 per cent overall.
Perth leads the pack again with a predicted 7.4 per cent increase, followed by Brisbane at 6.4 per cent and Sydney at 6 per cent.
Melbourne and Hobart are expected to see more modest growth of 3.9 per cent and 2.4 per cent, respectively, while Canberra is forecast to rise by 3.3 per cent and Darwin by 1.9 per cent.
Over the third quarter of 2024, monthly housing price growth averaged 0.4 per cent, a decline from 0.6 per cent in the previous quarter and significantly lower than the 0.9 per cent rate seen in the third quarter of 2023.
Supply constraints remain a critical issue for many markets, particularly in states like Western Australia, where demand far outstrips available housing stock.
Nationally, building approvals and completions per person are at record lows.
Affordability remains a significant issue in many markets, with cheaper properties recording stronger price growth as buyers seek more affordable options.
The report found that it now takes 10.6 years to save for a 20 per cent deposit on a home, further highlighting the affordability challenge facing buyers.
