Porters House December Australian Property Market Update
As 2024 draws close, National prices have risen by 5.5% over the past 12 months. This is the 22nd straight month of growth, however growth is further slowing, increasing in Sydney by 3.3%, Brisbane by 12.1%, Adelaide by 14% and Perth by 21%. Melbourne fell by 2.3% over the past year.
As expected, the Reserve Bank left the official interest rate on hold at the December meeting. The next meeting will be mid-February 2025, and most economists expect rates to fall between February and May 2025, whilst financial markets expect rates to fall mid-2025.
One huge change is that The Reserve Bank of Australia (RBA) will have two boards from 1 March 2025 – one to set the cash rate and another for governance. As 2025 will be a Federal election year, there is a lot of pressure on the RBA by the federal government to decrease rates.
GDP per capita has continued to fall, with this being the 7th consecutive quarterly drop.
Once the interest rate is lower in 2025, I expect the house price growth to strengthen.
The Sydney market peaked in August, and November was the second month of falls, down by 0.2%. Growth also slowed in Brisbane, which was up 0.6%, Adelaide at 0.8 and Perth up 1.1%.
The number of properties available for sale has increased, with capital city listings up 16% since the end of winter, however, capital city home sales have decreased over the past three months and is -4.6% lower than a year ago and -2.0% below the previous five-year average.
Rental growth has also slowed, rising 0.2% in November to be 5.3% higher over the past 12 months. This annual change in national rents was the smallest since April 2021. In 2023, rents increased at an annual rate of 8.1% and by more than 9% over the prior two years.
Gross rental yields across the combined capitals are now 3.47% and 4.38% for the combined regionals.
On a positive note, total superannuation savings hit $4.1 trillion at the end of September, up more than 13 per cent on the prior quarter, according to new data from the Australian Prudential Regulation Authority. With at least 11.5% superannuation contributions, I expect this to continue with strong growth into 2025 and beyond.
As a result, we are seeing more people buying property in their SMSF or setting up an SMSF to enable them to purchase property, so if you would like to know more, please get in touch.
Many people review their property plans over Christmas and New Year, so if you have any property purchasing plans for 2025, please don't hesitate to contact us.
We wish you and your family a great Christmas, a wonderful New Year break, and a prosperous 2025!!!
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