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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.
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.
“We're forecasting a 13% fall for houses and 8% for units, and we're forecasting Sydney to have the greatest fall in house prices of around 18%, while we have Perth houses at the other end of the scale with a more modest 4% drop.”
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%.
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.
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.
Australian property values experienced a downturn in 2022 and prices continue to fall—but predictions of the overall peak-to-trough price decline tend to vary between 15-25%. Read more about whether the Australian property market is going to crash.
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.
High house prices in Australia are primarily driven by supply and demand imbalances, tax policies, low-interest rates, and rising household debt.
Affordability constraints will continue
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.
In Australia, the average life of a brick home is 88 years and a timber home is 58 years (Snow and Prasad 2011). Many homes last much longer than this. Decisions that are made about homes today will continue to have consequences for many decades.
Mr Young noted that the index also shows that average wages will jump by 425% over the next 28 years to 2050 which will drive up property prices by 486%. “As a result, the average house price in Sydney will also surge from $1.2 million in 2023 to $7.3 million by 2050.
Prices could fall further
If you buy in a recession, there is always the risk that prices could fall even further. That said, Australian property prices usually tend to rise in the long run, especially in capital cities. So if you're prepared to spend some time owning your property, you're likely to come out ahead.
Australia's current housing crisis is driven by the nation's unique demographics and a shortage of available residential land near jobs and services, with the impact of interest rates and government homebuyer subsidies often overstated.
Australia's housing prices have experienced the largest decline in a calendar year since the global financial crisis (GFC) in 2008, when home values fell 6.4 per cent nationally.
It'll probably come as no surprise, but the best time of year to buy property in Australia is just before or just after winter. As people hibernate during the colder months, fewer properties are listed for sale. There is also a significantly reduced number of buyers.
According to CoreLogic, the pandemic saw house prices rise 28.9% between September 2020 and May 2022. This is the fastest increase in property values in Australia's history. This is the cycle peak, also known as a seller's market. During this phase, you'll find buyer demand outweighs supply.
Selling Houses Australia is back for Season 15! Andrew, Wendy, and Dennis will transform some of the most testing homes that no one wants to buy into saleable properties with spectacular results.
Key points. A new report ranks global property markets as fair valued, overvalued or in bubble risk territory. Sydney property prices are overvalued despite recent price falls, the report found. Experts warn prices will not necessarily fall back to levels that would be fair value.
The OECD's stark warning of a “rout” in house prices that ripples across the entire economy has raised the spectre of the crash of 1987.
Over time, however, the increase in interest rates works to reduce the demand for housing and so housing prices decline.
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.
Very constricted land supply and extremely onerous planning approval processes. Unusually high stamp duties. High proportion of variable rate mortgage loans compares to past housing bubbles outside of Australia, making borrowers more vulnerable to rising interest rates.
As such, the recovery could also take years, if it follows the 2017-2020 housing slump where prices took three years and three months (39 months) from peak to upturn. So far, there were no signs house prices have hit their peaks, Mr Lawless said.