TL;DR
  • Capital cities and regions a mixed bag, with opinion divided.
  • Hobart and Canberra likely to lead falls; Sydney and Melbourne could be flat
  • Brisbane and Adelaide to continue strongly; Perth to record strong growth albeit question marks remain on its sustainability.
  • Exuberance in the market could happen again if the RBA cuts rates in second half of 2024.

See Also: Personal finance and wealth outlook, 2024

See Also: Economy and inflation outlook, 2024

With the benefit of hindsight, you can pull this out at the end of 2024 to see if the experts were right.

The capitals

As Domain chief of research Dr Nicola Powell told the Savings Tip Jar podcast earlier this month, once again Sydney could lead the rate of price growth, especially when it comes to houses.

Domain is forecasting Sydney house prices to climb between 7% and 9% next year.

Meanwhile, those of Brisbane and Adelaide have been tipped to rise 7% to 8%, and Perth property is expected to climb 6% to 7%.

However, Melbourne house prices are tipped to grow just 2% to 4%.

Melbourne, due to its capacity to sprawl and having subdued demand, could continue its modest growth, if it grows at all. Other smaller capital cities could experience strong growth.

Propertyology head of research Simon Pressley said there are other factors at play for Melbourne, who forecast 0 to 3% growth for the city.

"The state’s ability to support economic growth will be significantly hindered for a decade or so due to the enormous state debt, onerous taxes and an interest bill that is fast approaching $1 billion per month," Mr Pressley said.

Perth, forecast for 13 to 18% growth, could be the leading capital city, but Mr Pressley noted its lack of economic diversity as a headwind long-term for the western capital.

Generally most pessimistic about the capitals was SQM Research, with its 'Boom and Bust' report highlighting a base case for Sydney values to fall up to 4%, and Melbourne falling up to 3%.

Other capitals will be stronger, with SQM's full chart below.

However CoreLogic's view was more balanced, with tougher economic conditions to weigh on property growth through much of 2024.

"It is not uncommon for downswings to eventually cascade down to the more affordable segments at a lag. For this reason, even markets with very strong performance could see a reduction in the pace of growth through 2024," head of research Eliza Owen said.

In 2023, Hobart generally led the capitals in terms of property price falls, with North Hobart and Taroona down -13.9% and -13.8% respectively, according to CoreLogic data.

The regions

Regional hubs will be more mixed, with affordability ceilings reached in some areas and demand slows due to a normalisation of workplace expectations post-Covid.

Some others, which avoided a lot of pandemic hype, could come into the fray off lower price bases.

Proptrack data showed that Cumbalum, Ocean Shores and Mullumbimby - in the Northern Rivers NSW region that experienced boom growth through the pandemic - posted property price falls of 7.6%, 10.1% and 11.9% in 2023 respectively.

That said, their median values are still over the $1 million mark. Lismore, Ballina, and West Ballina were also in the top-10 for price falls in 2023 with medians under $1 million.

Propertyology forecasts that certain regional areas could be set for a big 2024, recording value gains of 15 to 20%.

These could include Rockhampton QLD, Hahndorf SA, Bunbury WA, central Queensland, Port Lincoln SA, Albany WA and north Queensland.

These areas largely escaped the pandemic-led hype, and are coming off lower price bases.

Read more in-depth forecasts and suburb picks:

SQMBoomBust.jpg

Source: SQM Research's Boom or Bust Report, four different economic scenarios.


Advertisement

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
Featured Online ExclusiveUP TO $4K CASHBACK
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
Featured Refinance onlyAPPLY IN MINUTES
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) repayments. All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for a 30 year term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. For Interest only loans – the monthly repayment figure is applicable only for the interest only period. After the interest only period, your principal and interest repayments will be higher than these repayments. For Fixed rate loans – the monthly repayment is based on an interest rate that applies for an initial period only and will change when the interest rate reverts to the applicable variable rate.

The Comparison rate is based on a secured loan amount of $150,000 loan over 25 years. WARNING: These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees together with costs savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products. Rates correct as of . View disclaimer.

Photo by Kat Nesterenko on Unsplash