Average House Prices in Australia averaged 657.65 AUD Thousand from 2011 until 2023, reaching an all time high of 930.60 AUD Thousand in the first quarter of 2022 and a record low of 486.30 AUD Thousand in the third quarter of 2012.
Melbourne and Hobart are braced for falls of 10 per cent, while Adelaide, Darwin and Perth will see a marginally softer single-digit drop, the report said. The flipside is, even with potential falls of up to 10 per cent, national property prices will still be more than 18 per cent above pre-pandemic levels.
The downturn in the global housing market is set to continue in 2023, with most Australian cities expected to fall by double digits in what is shaping up to be the deepest property correction in more than 30 years. Few people are willing to buy or sell in a falling market, and stock is hard to find.
However, rising interest rates will increase borrowing costs. The median house price increased by 14% to $1,019,000 in June 2022. In the next 18 months, a 9% fall in the median house price is expected with median house price predicted to rise to $996,000 by June 2025.
The median house price in Sydney has rallied in 2023 to grow by a huge +2.0 per cent in May to over $1.3 million, bringing quarterly gains right back up to +5.5 per cent, levels not seen since the 2021 boom.
Sydney's ailing housing market will bounce back next year with price growth that will lead the country, new economic modelling has revealed. SQM Research's annual Housing Boom and Bust report released Tuesday showed Sydney prices were primed for growth over 2023 due to an increase in underlying demand for housing.
However, there are also predictions that Brisbane's property prices could experience a decline of 12% in 2023, following a modest rise of 1% in 2022. According to the PropTrack Property Market Outlook February 2023 Report, the expected median house price in 2023 is $719,669, with the median unit price not specified.
The average annual growth rate for well-located capital city properties is about 7%, which means that Australia's median dwelling price should be around $1.1 million in 2030. But some properties will outperform others by 50-100% in terms of capital growth, so take these house price predictions with a big pinch of salt.
It's often said seven to 10 years is needed for property values to double, but new PropTrack analysis shows it took the median house price 15.4 years through to May 2023. It required even longer for units, around 17.8 years.
In summary, we continue to expect house prices to decline in 2023 with total peak-to-trough losses in the order of 15 per cent-25 per cent, as we outlined in October 2021.
Property Prices Could Potentially Surge in 2024
Evans and senior economist Matthew Hassan in a market update. "Prices are now expected to increase by 5% in 2024, revised up from 2%." Westpac predicts that by 2024, house prices will rise by 5% in both Sydney and Melbourne, 6% in Brisbane, and 8% in Perth.
Supply and demand imbalance
Housing supply is under ongoing strain due to an increasing population and a limited land supply, particularly in large cities like Melbourne and Sydney. This increased demand, combined with an inadequate supply response, drives up the average residential property prices.
The data provided exclusively to The Sunday Telegraph showed the median house price would be $1.92m in 2027 and the median unit price would be $1.02m. Sydney prices would also be nearly triple those in Perth, Adelaide and Darwin if the current growth trajectory continued.
Westpac has revised its house price forecasts, with dwelling values expected to stabilise in 2023 (initially forecast a -7% decline). National dwelling values are predicted to rise 5% in 2024, up from 2%. Increased migration, surging construction costs, and low market supply are contributing to the stabilisation.
The combined capital cities could see house prices rise 2 per cent to 4 per cent by the end of the 2024 financial year and units could climb by 1 per cent to 3 per cent, the Domain Forecast Report predicts.
House prices in the national capital are set to grow between 2 per cent and 4 per cent, according to the Domain forecast. Despite this, the median price will still be lower than the $1.17 million peak of June 2022 after the largest peak-to-trough fall of all the capital cities.
Therefore, the median price is expected to be $1,405,000 in the June 2025 quarter, with this figure representing an overall decline of some 8% from the June 2022 level.
“Owning a home is one of the biggest and most important purchases most people make in their lifetime and when Aussie entered the market some 30 years ago, the median dwelling value across the country was $114,034. Today it is more than $700,000 demonstrating the gains that can be made over a generation.”
The problem is naive investors believe this myth and buy any old property and think its value will double in a decade – I guess that's why so many investors fail. But as with any good myth, there is always partial truth. Note: So the truth is… some properties do double in value every 7 to 10 years, but many don't!
Australia's property market is considered to be among the most expensive in the world, with Sydney and Melbourne regularly featuring among the list of least affordable housing markets, along with some US and Canadian cities. One measure of affordability is the household debt-to-income ratio.
Observers including the Organisation for Economic Cooperation and Development (OECD) and International Monetary Fund (IMF) have raised concerns about Australia's high property value-to-income ratio. For example, in May of 2022, the median dwelling value was 8.5 times the median household income.
By June 2025, the median house price in Melbourne is expected to be $995,000.
Building a home allows you to customize everything from scratch according to your preferences. However, the biggest disadvantage is that buying a home is costly. After comparing building or buying a home, we analysed that building a home is cheaper than buying a home.
The average cost to build a 3-bedroom house
$1300 per square metre for a 3-bedroom weatherboard house on a level block, using budget materials. $1600 – $1900 per square metre for a 3 bedroom full brick single level project home, on a level block, using mid-range to high-end materials and finishes.
“The unique set of circumstances we're seeing this year may present a prime opportunity for those looking to invest in the property market,” Mr Khursigara told Your Investment Property magazine. “Both Federal and State governments are buoyant with the estimates of new migrant arrivals in 2023.