AUSTRALIANS ringing in the new year could see a small drop in the value of their homes, new property data has revealed.
According to research by CoreLogic, the start of 2025 may see a continuation of the “drag” on buyer demand which could result in a small decline in national home values in the first part of the year.
The report notes a drop in interest rates by the Reserve Bank in 2025 could increase demand among prospective buyers.
“The implementation of stage 3 tax cuts from July this year (2024) showed an anaemic response in the housing market, with national home value growth continuing to slow,” it reads. It says the slowdown in rent growth recorded in 2024 is also expected for 2025 as demand continues to be squeezed due to high cost-of-living constraints.
Any unemployment increase in 2025 may disproportionately affect renting households, as they tend to be younger people or lower-skilled workers on more precarious employment arrangements than others.
But in the face of elevated interest rates and global uncertainty, the Australian housing market demonstrated “surprising resilience” throughout 2024, the report said.
It found the number of homes had increased 8% on the previous year.
The total number of home sales reached 528,000 nationally in the 12 months to November, marking a 6% rise from the previous five-year average.
Home values underwent a 5.5% increase that same period, with the combined value of Australian homes surpassing $11 trillion.
CoreLogic head of research Eliza Owen said the market’s initial strength in 2024 gradually waned due to declining demand, rising levels of advertised supply, and a shifting outlook for inflation and interest rates.
The national top 10 highest sales for 2024 skewed to the nation’s east coast, and included Sydney’s eastern suburbs along with Melbourne’s Toorak.
Across capital city markets, Perth dominated the list for the strongest growth in house values.
All suburbs delivered growth of 30% or above over the year.
