“As a result, the average house price in Sydney will also surge from $1.2 million in 2023 to $7.3 million by 2050.
Sydney House Market
Sydney's recent house price boom has ended. Prices had fallen in April 2022, declining 18% from the peak. The median house price in Sydney was $1,531,000 in June 2022 and is expected to fall to $1.2 million in June 2025.
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.
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.
In the next three years, new dwelling supply will balance stock availability. The median house prices are expected to fall 9% in the next 18 months, before rising to $996,000 by June 2025.
According to the report, it's commonly stated that property prices double every seven to 10 years, however, this hasn't been the case as of late as very few markets have achieved this growth in under a decade despite strong price gains nationally during the COVID-19 pandemic.
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.
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.
By the end of financial 2024, Sydney median house prices are expected to hit $1.66 million, which would eclipse the $1.59 million peak set in March 2022. Sydney house prices are forecast to increase by up to 9 per cent by next June, fuelled by strong demand and low supply.
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.
The report Futurology: the new home in 2050 by the NHBC Foundation suggests for example that future living may be more cramped. The report also suggests that the increasing number of elderly and young people who can't leave home means that multi-generational accommodation will become more common.
Innovation and Science Australia's vision for 2030 is that Australia will be counted within the top tier of innovation nations. We will take pride in our global reputation for excellence in science, research and commercialisation. a fair and inclusive society with a high quality of life.
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.
House prices in Sydney, Adelaide and Perth will hit record highs, it predicts, with unit prices in Brisbane, Adelaide and Hobart also potentially smashing existing records. In addition, the Domain Forecast Report says the markets in all those cities may fully recover from the 2022 downturn by this time next year.
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.
On the surface, Thornley suggests now isn't a bad time to buy – though he argues focusing on market timing is the wrong approach for property. “Now is a better time to buy than say 18 months ago and those laughable predictions of 20-30% crashes in housing prices. This simply doesn't happen in Australia.
Between 119,400 and 138,550 new homes could be built over the next 5 years (2022–23 to 2026–27) – the range is based on 3 different forecast scenarios. Although lower than previous years, the averaged 5-year forecast is in line with implied demand for the next 5 years.
The Sydney property market is looking promising for investors as prices remain well below peak levels, rental vacancies hover around record lows, asking rents continue to increase, and further demand is expected as immigration returns en masse in 2023.
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 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!
With borrowing costs continuing to rise and the subsequent reduction in borrowing capacities, property price falls are likely to continue and accelerate in 2023, Kusher said. “We're expecting prices to decline by up to 10% nationally in 2023, with greater falls expected in the larger capital cities,” he said.
Average real estate return on investment
The average rental yield in Australia is around 8%, with 1% accounting for ongoing costs like dues, strata and insurance fees.
The Australian property market has been a topic of much speculation and concern in recent years. Between 2020 and 2021, the market witnessed a significant upswing, with prices skyrocketing in the wake of the COVID-19 pandemic.
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.
RLB forecasts that house-building prices this year will rise by as little as 4 per cent in Sydney to as much as 7.5 per cent on the Gold Coast. But the rate of price rises has halved in some cities as supply chain pressures subside and material cost escalation eases.