Sydney's mid-point house price stood at $1,221,367 at the end of 2022 and
By 2024, the bank is expecting house prices to gain 5 per cent in both Sydney and Melbourne, that prices should rise 6 per cent in Brisbane, by 8 per cent in Perth, and that there should be a 5 per cent gain nationwide.
“Prices now expected to lift 5 per cent in 2024, revised up from 2 per cent.”
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.
By the end of 2024, Sydney, Melbourne, Canberra and Hobart are forecast to rise by 2 per cent, Brisbane by 5 per cent, Perth by 4 per cent and Darwin by 3 per cent. Nationwide, house prices are set to increase by 3 per cent, but Adelaide is expected to drop by 1 per cent.
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.
If prices were to continue to grow as they have been, by 2027, the median house price in Sydney would top $2 million – it currently sits at $1.34 million – and hit almost $1.4 million in Melbourne – it's currently $900,000 there.
Nationwide prices are expected to rise by approximately 2 per cent by the end of 2023. However, as the RBA potentially cuts interest rates before the end of 2023, demand pressures will contribute to a favourable environment for property prices.
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.
If the price rises are maintained for the rest of the year, home values will end up about 4% higher in 2023, defying earlier predictions of sharp falls of 10% or more for this year, CoreLogic says. “Economists are shredding their previous price forecasts,” said Sally Tindall, research director for RateCity.
Prices across the country are set to slide by up to 10 per cent by the end of 2023, with Sydney, Brisbane and Canberra to be worst affected by the downturn. The latest PropTrack report predicted property values in Sydney, Brisbane and Canberra could slump by as much as 11 per cent as successive rate hikes bite.
Sydney house prices may be expensive now but they could pale in comparison to what future generations will pay. Analysis of housing trends revealed Sydney house prices will average nearly $1.8m by the end of the decade, up from $1.06m currently, if they continue rising at the same pace as the last 30 years.
The grim outlook for the 2023 property market has come from investment bank Jarden, which said the Reserve Bank's “hawkish” interest rate hikes to calm inflation was to blame.
Sydney's house prices have increased by 4 per cent in the past three months and were up by 1.2 per cent since the start of the month alone.
Sydney continued to rack up the largest gain, with home values climbing by 1.8 per cent – the fastest monthly increase since September 2021. In the past three months alone, values lifted by 4.5 per cent.
So Will the Property Market Crash? According to Domain figures, the value of Australia's housing market fell by -5% across capital cities in 2022. Sydney dropped by -10.9% and Melbourne was down -5.9%. While Canberra and Brisbane house values fell by -6% and -1.1% respectively last year.
au's analysis showed that, even if prices rose at a similar rate to inflation over the next five years, the median house price would still be near $1.5m in 2027.
Will House Prices Go Down In 2023? House prices are expected to soften further in 2023 but falls may not be as severe as some expect if the RBA stops increasing rates before the cash rate reaches 4%.
By 2041 we will have 13 million homes, up from 10 million in 2021.
Significant Interest and Fees
Buying a home is more expensive than renting. Even in cases where renting and mortgage repayments are the same, you have to pay for things like maintenance, body corporate fees, and council rates. Further, ever-fluctuating interest rates and unexpected costs can burden your finances.
It's a good time for home buyers, especially if they're in rented property with rents rising, and rents more expensive now than mortgages, and for investors who are after cash flow because of those high rents and low vacancy rates.”
High house prices in Australia are primarily driven by supply and demand imbalances, tax policies, low-interest rates, and rising household debt.
In Sydney, one of the world's most overvalued property markets, prices are down 13 per cent from their peak while sales fell 28 per cent last year compared with a 17 per cent decline nationwide, according to CoreLogic data.
“As a result, the average house price in Sydney will also surge from $1.2 million in 2023 to $7.3 million by 2050.