Australia’s wealth is significantly tied to its housing market. By late 2023, the total value of the nation’s residential property had reached $10.4 trillion, according to the Australian Bureau of Statistics (ABS).

Overall, the property market has rebounded from the price declines of 2022. Despite a series of interest rate increases, pushing the cash rate to a decade-high of 4.35 percent, property prices across the country unexpectedly rose in 2023.

Economists attribute this resilience to the combination of limited housing supply and strong demand driven by population growth, which has helped mitigate the impact of higher interest rates and low housing affordability.

With uncertainty about whether the cash rate has peaked or when it might decrease, forecasts for the housing market in 2024 are varied among experts.

Housing Price Predictions

Domain forecasts national house prices to increase by 5 to 7 percent in 2024. Specifically, Sydney’s median house price is expected to rise by 7 to 9 percent, while Brisbane and Adelaide are projected to see increases of 7 to 8 percent. Perth is anticipated to experience a rise of 6 to 7 percent.

In Canberra, a more modest increase of 3 to 5 percent is predicted, while Melbourne and Hobart are expected to see their medians rise by 2 to 4 percent. According to Domain’s Chief of Research and Economics, Dr. Nicola Powell, a reduction in interest rates would likely boost demand and activity in the housing market.

Dr. Powell suggests, “A cut in interest rates is likely to improve consumer sentiment, which, in turn, would increase housing activity. We anticipate this shift to start occurring in late 2024.”