Which cities and regions outperformed in 2023, and what can we expect to see in 2024?
The property market made a strong comeback last year, following a slump in 2022 driven by eight consecutive rate rises.
Despite a further five rise in 2023, the market began to pick up early in the year, and by spring, listing volumes, sales, and home values were outperforming 2022.
National home values ended the year 5.52% higher than in December 2022, reaching a new peak. The combined capital cities and combined regional areas were both up year-on-year.
The standout cities were Perth, Adelaide, and Brisbane, which managed to avoid the downturn and have continued to reach new price peaks each month.
Of the eight capital cities, only Hobart and Darwin saw a year-on-year decrease. Regional Victoria and the Northern Territory were also slightly behind compared to last year.
Unsurprisingly, the regions that saw the largest home price growth in 2023 were in Perth, Adelaide, and Brisbane.
Five of the top 10 regions were in Perth, and three came from Brisbane.
Home prices in Perth's South West rose by 18.23% despite the high cost of lending deterring many buyers.
Other strong markets in Perth include the South East, North West, Mandurah, and the North East, with Perth Inner being the city's only region that didn't make it into the national top 10.
Adelaide-North is the most affordable region in Adelaide, with houses in many of the suburbs selling for under $400,000. The region recorded growth of 14.81%.
During a period of high interest rates, which have reduced the amount that many buyers can borrow, the more affordable areas in Adelaide are experiencing a renaissance.
The housing market has been surprisingly resilient throughout 2023 despite high-interest rates and inflation, which decreased the average ratio of household savings to income to just 1.1% in September, according to the Australian Bureau of Statistics – the lowest level seen since December 2007 at the onset of the Global Financial Crisis.
During 2024, home values are expected to continue to rise, albeit slower than last year.
PropTrack's 2024 housing forecast suggests that home values could increase by between 1% and 4% over the next 12 months, with the combined capital cities' value increasing by between 2% and 5%.
Based on strong performances in 2023, Perth, Adelaide, and Brisbane will likely see the highest home value increase, with the three cities potentially increasing by 8%, 7%, and 6%, respectively.
Hobart and Darwin are not expected to fare as well and could experience falls in values similar to what we saw in 2023.
Read the PropTrack Property Market Outlook report here.
There are multiple factors that could affect home values in the coming 12 months, including further rate rises - although the likelihood of this appears to be easing - an increase or decrease in inflation, the volume of new construction, and tax cuts expected to hit mid-year.
These and many other factors can influence home values; however, the current forecast is for growth to be slow and steady in 2024.
