Adelaide property price growth to moderate

Property prices in Adelaide are set to increase at a slower pace in the next financial year, but the city is expected to remain the second-strongest capital for growth.

Jun 27, 2024, updated Jun 27, 2024

A new PropTrack Property Market Outlook Report found that Adelaide property prices are set to rise between 5 per cent and 8 per cent in the 2024-25 financial year, down from 12.9 per cent growth over the past 10 months.

But property price growth in Adelaide will be the second-strongest nationally in FY25, after Perth which is tipped to see growth of 8 per cent to 11 per cent in the next financial year.

The report said Australian property prices will increase by as much as 5 per cent on average in 2024, as prices have already risen by 2.7 per cent from January to May.

In the financial year-to-date, property prices nationally are up 5.9 per cent and are expected to rise by 2 to 5 per cent in FY25.

PropTrack director of economic research Cameron Kusher said the Australian property market was proving to be “far more resilient than anticipated”, making the forecasting process “increasingly challenging”.

“Buyer demand remains strong despite interest rates sitting at 12-year highs, borrowing capacities falling and the volume of stock for sale increasing, leading property prices to rise at a faster rate than expected,” Kusher said.

“Over the next financial year, the introduction of Stage 3 tax cuts and projected interest rate cuts have the power to further entice buyer demand while supply from new dwelling commencements and completions are expected to remain low.

“We expect home price growth will be slightly stronger by the end of the 2024-25 financial year than annual growth over the 2024 calendar year, with prices anticipated to rise in the larger markets of Sydney and Melbourne over the next 12 months while slowing in several capital cities.”

Like Adelaide, other Australian capital cities will see property prices moderate in FY25, with Brisbane, Sydney and Melbourne all tipped to grow between 3 per cent and 6 per cent.

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Canberran house prices are expected to rise between 2 and 5 per cent, up from 1.3 per cent in the financial year to date, while prices of houses in Hobart will grow by as much as 3 per cent having fallen by 1.5 per cent in the financial year to date.

Via PropTrack Property Market Outlook Report June 2024.

Other findings from PropTrack’s report include national sales volumes from January to May 2024 were 13.9 per cent higher than the same period in the year prior.

Further, houses are selling faster than they were previously, with the median time a property listing remained on falling to 38 days in May 2024 from 43 days.

“New listing volumes in Sydney, Melbourne and Canberra have seen the largest increases, highlighting how the willingness from sellers to list has been matched by the enthusiasm from buyers to purchase,” Kusher said.

“We are starting to see an increase in new listings coming to fruition across most other markets now too.

“The main factor supporting strong price growth has been an increase in demand for housing as new and total listings have increased, but there are also other factors to consider which are contributing to the strength of established home prices.”

Kusher said it was a “confusing time for consumers” with buyer pessimism outweighing optimism per the Westpac-Melbourne Institute Time to Buy a Dwelling Index.

“They have low confidence and don’t believe it is an ideal time to be purchasing a home, likely due to record-high home prices and high interest rates however, given expectations of continued price rises, many are overcoming affordability challenges and purchasing,” said Kusher.

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