November market insight: A state-by-state analysis of the Australian property markets

According to the 2024 PIPA Annual Investor Sentiment Survey, around 46 per cent of investors believe that it is a good time to invest in residential property, down from the 56 per cent reported in 2023 and 62 per cent recorded in 2021 – when interest rates were at record lows.

PIPA chair Nicola McDougall said that though investor sentiment nationwide has dropped significantly over the past three years, there is still optimism in the market yielding substantial growth in three key markets.

This report showed that areas, such as Perth, Adelaide and Brisbane, are finishing the year posting double-digit dwelling price growth which is projected to continue into 2025.

In Sydney dwelling prices are still at record highs despite having shown their first monthly decline since January 2023.

McDougall said that “the impact of anti-investor rental reforms in Victoria and its new ‘temporary’ land tax that lasts for 10 years continues to drag down property prices in that state as well as kybosh investor demand”.

“As long as these punitive policies and taxes remain, investor demand is likely to continue to be subdued over the short- to medium-term,” she said.

McDougall said that the latest inflation data is moving in the right direction, but the Reserve Bank has yet to signal when interest rates might be lowered

“The only thing that is certain is that it is clear that interest rate cuts are on the horizon, which will be welcome news to all current and prospective home buyers and investors,” she said.

NSW

Good Deeds Property Buyers principal Veronica Morgan said the NSW property market remained steady throughout 2024, but is expected to see an increase in stock and a slowdown in buyers’ activity as we approach the Christmas period.

According to CoreLogic’s Home Value Index, Sydney’s dwelling prices rose by 0.5 per cent over the three months to September, while regional dwellings increased by 0.4 per cent.

Unit prices rose by 0.9 per cent in Sydney and 1.3 per cent across regional NSW over the same period.

“While this growth has been nothing to write home about, Sydney dwelling prices reached a new record in July, so we’re currently in record price territory. Regional prices remain 2.8 per cent lower than their COVID highs,” Morgan said.

In the September quarter, CoreLogic reported that Sydney’s upper quartile home values dropped by 0.3 per cent compared to the broader middle half and lower quartiles which grew by 1.2 per cent.

“Traditionally, the upper quartile of the housing market tends to spearhead cycles, both during upswings and downturns,” Morgan said.

Since the beginning of August, auction listing volume had a steady increase, and Domain recorded between 63 per cent and 67.8 per cent clearance rates over the same period.

“Clearance rates are a particularly important metric in the inner Sydney market. They demonstrate not only buyer confidence but also vendor willingness to meet the market,” Morgan said.

On the third weekend of September, total auctions exceeded 1,000 for the third time in 2024, before setting a new record of over 1,100 auctions the following weekend.

Morgan noted that the strong clearance rates in the face of increased listings showed how resilient the Sydney market was.

According to CoreLogic, in September, new listings in Sydney were up by 3.7 per cent – compared to the same period last year with a 6.9 per cent increase in total listings.

Morgan said that the listing numbers were telling that the buyer pool was not absorbing all of the new stock.

In the NSW region, listing numbers were also up by 3.5 per cent, but it took longer to sell, with 52 average days on the market over the September quarter compared to 49 days a year ago.

In September, according to Domain’s Rental Report data, Sydney recorded its weakest rental price growth for house rents since 2020, while unit rents remained stable for the first time in nine months.

“Nevertheless, price growth may be slowing, but vacancy rates remain low, and rents remain at an all-time high in most locations,” Morgan concluded.

Victoria

According to JL Property director Jenny Via, the Victorian real estate market remained “sluggish” and was favourable to buyers in the September quarter.

CoreLogic data revealed that Melbourne’s dwelling prices fell by 1.1 per cent during the quarter, with a 1.4 per cent drop over the past 12 months.

Regional Victoria dwellings also declined over the past 12 months as house and unit prices fell by 1.3 per cent and 1.6 per cent, respectively.

“As a result, Melbourne’s house prices have increased by only 9.9 per cent since March 2020, far slower than in other capital cities, and they are 5.1 per cent below the peak price recorded in March 2022,” Via said.

She noted that the September quarter hit the Victorian market differently with median house prices in the high-end market facing serious downward pressure, while middle-ring suburbs experienced more moderate declines, the outer suburbs declined the least, if not increased.

“This is primarily due to a shrinking borrowing capacity from high interest rates, which has shifted demand to more affordable areas. However, the premium of new buildings in outer suburbs could also be a potential reason contributing to the price resistance,” Via said.

According to PropTrack, the number of dwellings for sale in the state increased by 10.2 per cent year-on-year, with Melbourne having a 16 per cent increase.

On the other hand, ABS loan data showed that in August new loan commitments for owner-occupiers in Victoria rose by 11 per cent year-on-year, while investor loans increased by 12 per cent, indicating strong market absorption capacity.

Via noted that a new trend emerged in the Victorian market as investors are leaving their spot to home buyers and more investment properties have been transformed into primary housing.

“This trend further solidifies the foundation for dwelling prices in the long run, as owner-occupiers tend to hold onto properties for extended periods,” Via said.

“Despite Melbourne’s weak performance in the short-term, its long-term potential remains widely recognised by investors.”

PIPA’s Annual Investor Sentiment Survey 2024 showed that 26.2 per cent of investors believe Melbourne is the best city in Australia for property investment. In comparison, Perth reached 25.1 per cent, while Brisbane peaked at 17.8 per cent – ranking second and third, respectively.

“Even though the market is declining statistically, A-grade properties remain scarce in the market, attracting strong competition and prices continuously appreciate,” Via concluded.

Queensland

Hotspotting director Terry Ryder said Queensland saw a strong price growth in municipalities and across dwelling styles, asserting Queensland as one of the best market performers.

“Queensland now also leads the nation in overall real estate transactions, including purchases by both home buyers and investors,” Ryder said.

Ryder noted that some of the states’ areas with the greatest prospect are in Brisbane’s inner precinct, which is made up of suburbs within 8 kilometres of the CBD and has seen a high number of apartments and townhouses being purchased.

He said the area should continue to have strong growth as the upcoming 2032 Olympic and Paralympic Games would up buyers’ interests.

Other suburbs, such as Newstead, Bowen Hills, Fortitude Valley and the Brisbane CBD, also saw a rise in transactions over the June quarter, with units being in high demand and often preferred over houses.

“This precinct is desirable for its close proximity to the CBD and is benefitting from ongoing improvements to connectivity and amenities, such as the $6.3 billion Cross River Rail project,” Ryder said.

“While houses in the precinct tend to be expensive, unit prices start at a much more affordable median of $485,000. With multiple residential projects planned or underway, there may be an increase in supply in the future.”

North of Brisbane, the Sunshine Coast property market has also experienced significant price growth since 2020 due to a strong economy and extensive investments in infrastructure.

Over the past five years, the region has seen its resident number explode as 20,000 new jobs have been created. Additionally, there are over $20 billion of infrastructure projects either completed, under construction or planned directly impacting the market growth.

“With a booming economy, averaging 4 per cent growth per year over the past 15 years, the Sunshine Coast continues to offer lucrative investment prospects,” Ryder said.

Additionally, Ryder noted that in 2024 a new market emerged 530 kilometres north of Brisbane with the coastal city of Gladstone, thanks to the the presence of major industrial hubs in the LGA, including two of the world’s largest alumina refineries and the fourth-largest coal exporting terminal.

“As the city experiences a surge in construction for billion-dollar infrastructure projects, it is expected to continue growing and developing as an industrial hub through its state development area,” Ryder said.

“Gladstone is quickly becoming a leader in clean energy, with the highest concentration of hydrogen projects in Queensland. This has resulted in a rise in population, with an estimated 14,180 new residents.”

South Australia

Rise High investor director SA, Bryan Ong, said Adelaide’s property market showcased notable resilience in the July to September quarter – continuing its upward trajectory in the face of broader national trends.

According to PropTrack, the median house price in Adelaide climbed to $790,789, which represents a 4 per cent year-on-year increase with September solidifying this upward trend, with prices increasing by 0.53 per cent.

“This growth has enabled Adelaide to overtake Melbourne in median house prices, positioning it just behind Brisbane, Canberra and Sydney, and is largely attributed to robust demand coupled with a persistent shortage of housing supply, ” Ong said.

Ong noted that in many suburbs the competition among buyers has intensified and has pushed buyers to make offers above the asking price to ensure they’ll get a property.

“This heightened activity illustrates the strong demand for residential real estate in Adelaide, reflecting ongoing supply constraints and the challenges that come with them,” he said.

CoreLogic data showed that Adelaide’s rental market was also dynamic, with median rents at $580 per week and a vacancy rate remaining below 1 per cent – a tight rental market.

Ong noted that despite the law change that aimed to improve tenant’s rights – such as doubling the notice period to end a tenancy, requiring a valid reason to terminate or not renew a tenancy, and making it easier to rent with pets – many prospective renters are still offering above-market rates or paying multiple months’ rent in advance to secure a lease.

“This trend highlights the ongoing challenges within the rental sector and reflects broader supply-demand issues affecting the housing market as a whole,” Ong said.

Ong said that for investors, the strong rental demand is a positive indicator of potential returns.

However, the rising property price will push investors to identify investment-grade properties that can offer sustainable cash flow and capital growth before buying.

“As competition increases, investors must remain vigilant and strategic in their property selections to ensure favourable outcomes in this evolving market,” Ong said.

Ong noted that despite other markets cooling down as we approach the end of the year, Adelaide’s property market doesn’t show any signs of slowing down.

“Adelaide continues to demonstrate resilience, with both price growth and rental demand remaining strong,” he said.

“First home buyers are navigating a competitive landscape, while investors are optimistic about the city’s long-term potential, particularly in light of its recent performance compared to major capitals,” Ong concluded.

Tasmania

Timar Buyers Agency director David Zerna said the 2024 Tasmanian property market “tells a story of mixed signals and future promise”.

During the September quarter, Hobart’s median house price saw a 0.8 per cent decrease – settling at $654,302, while the rest of the state saw a 1.1 per cent decline.

New listings dropped by 21.1 per cent in Hobart and by 5.5 per cent across the state – suggesting that the competition among buyers could bring renewed energy in the months ahead.

Zerna noted that the rental landscape in Tasmania varied by region while vacancy rates increased to 2.5 per cent overall and 2.8 per cent in Hobart; rents have risen steadily to 5.3 per cent for houses in Hobart, and 3.7 per cent across the rest of the state.

“Investor yields are outperforming many mainland markets, averaging 4.3 per cent, and investors currently are buying circa 25 per cent of Tasmania’s housing stock, showing sustained, albeit cautious, interest,” Zerna said.

He noted that while the market is currently cooling down, the new $1.3 billion Marinus Link and the $27 billion 10-Year Infrastructure Pipeline will drive jobs, attract businesses, and solidify Tasmania’s role as a renewable energy hub.

“These developments promise long-term stability to the property market, making Tasmania a top destination for investors and lifestyle enthusiasts.”

“In short, while the property market might have hit the pause button for some time now, the state’s scenic beauty, paired with ambitious development projects, makes it hard not to feel excited about what lies ahead for Tasmania,” Zerna said.

ACT

Capital Buyers Agency buyer’s agent Claire Corby said the ACT market is in the middle of a “flatline period” due to auction results, supply uptick, buyer FOBO, and economic pressures.

“It’s been an early spring as a flood of supply came to market, with many investors tapping out to realise the price growth of recent years,” Corby said.

Over the last quarter, auction clearance rates in the ACT have declined hovering around 45 per cent to 50 per cent.

CoreLogic data showed that over September there was a -0.9 per cent decline in dwelling values due to the elevated interest rates and the rising cost of living.

“Without any relief on interest rates, the outlook suggests that prices could see further modest declines,” Corby said.

On the rental market, Corby noted that the regulatory landscape for investors is tightening as a new mandate, requiring a section 119 certificate before leasing a property, will come into effect in 2025.

“This additional step introduces further red tape and adds to the existing costs for investors to absorb, such as minimum insulation requirements and banning of no-cause evictions, already in place in Canberra,” she said.

She noted that the political landscape in the ACT might also impact the investor market should Labor and the Greens form a minority, they are expected to maintain a tenant-friendly environment.

“Should this partnership prevail, it’s expected that investor regulations will remain stringent,” she said.

Overall, going ahead, Corby said that the ACT property market faces a cautious period with flattening prices, increased stock held over the holiday season, and a more regulated rental sector.

“Buyers currently have the upper hand in a market with choice aplenty – albeit the A-grade properties always in hot demand from owner-occupier families – while investors who continue to ride out the storm must navigate an increasingly regulated and costly environment,” she concluded.

Western Australia

Focus Property Wealth mortgage broker Glenn Biggins said the Perth property market continues its “impressive run” – outperforming the rest of Australia.

According to CoreLogic data, Perth has become the fourth most expensive capital city, behind Sydney, Canberra and Adelaide, with a median house price up 24.1 per cent for the year to $797,184 – surpassing Melbourne’s $777,390.

“However, while the market remains robust, some initial signs of a softening trend are emerging,” Biggins said.

Quarterly growth eased to 4.7 per cent, down from 6.2 per cent in the previous quarter, with monthly growth at 1.6 per cent – with the deceleration being partly attributed to a slight increase in spring stock levels and a reported decrease in investment enquiries from eastern states’ buyers.

Biggins said that real estate agents in Perth have reported a decline in eastern state buyers – suggesting a shift in demand dynamics due to Perth’s affordability over other capital cities.

“This suggests a potential market slowdown is underway, although the overall strength remains undeniable,” Biggins said.

“The most resilient sector of the Perth market is the lower price bracket. Affordability remains a crucial factor, driving demand and growth in the low to middle price ranges.”

Additionally, data from the Real Estate Institute of Western Australia revealed a slight increase in stock levels which has impacted days to sell, yet still at low levels.

On the rental front, there are currently 1,915 rental properties available on the market, which is a small increase compared to the 1,719 properties available 12 months ago with a median rental asking price of $650 per week – which indicates a more balanced rental market.

“In the current environment, competition remains strong. Home buyers are attending open houses in significant numbers, and many properties are being sold quickly, often with multiple offers – there is also a trend of owners reselling their homes within two years, taking advantage of the recent market growth,” Biggins said.

He said that while the Perth market has been impressive in 2024, it is challenging to predict what is next to come.

“The current data suggests a period of slower, more subdued growth rather than a dramatic downturn,” he said.

“The near-term outlook remains positive, with factors such as net migration and future RBA rate changes being key factors that will affect demand and affordability of the Perth market into 2025,” Biggins concluded.