December 2024 Property Market Update: Momentum Shifts As Growth Stalls
08 Jan, 2025
Updated: 14 Jan, 2025
CoreLogic’s Home Value Index (HVI) ended 2024 with a national decline of -0.1% in December, marking the first drop in nearly two years. This signals a turning point for a housing market that remained largely resilient throughout 2024 but is now showing signs of correction. While the national housing market still recorded 4.9% annual growth, weakening demand and affordability constraints are beginning to put downward pressure on values.
Here’s CoreLogic’s report in full.
City Performance Overview
While the nationwide housing market cooled, regional variations persisted. Perth, Adelaide and Brisbane continued to outperform the larger capital cities in annual growth, although their growth rates moderated. Here’s a look at how key markets performed:
| State/City | HVI Change In December (%) | Details |
|---|---|---|
| Sydney | -0.6 | Sydney’s values declined for the month, reflecting the impact of growing stock levels and persistent affordability challenges. |
| Melbourne | -0.7 | Melbourne faced another drop, continuing a trend of declining values for much of the year, driven by buyer caution and affordability issues. |
| Brisbane | +0.5 | Brisbane showed moderate growth, supported by demand for more affordable housing options, but the pace has slowed compared with earlier in the year. |
| Adelaide | +0.6 | Adelaide continued to grow, leading the capitals in quarterly performance, aided by historically low stock levels and steady demand. |
| Perth | +0.7 | Perth posted the strongest growth among capitals in December but showed signs of moderation due to an increase in stock levels since winter. |
| Hobart | -0.5 | Hobart recorded another month of negative growth, highlighting weaker demand and affordability limits that continue to weigh on the market. |
| Darwin | +0.4 | Darwin’s values rose slightly, with stabilising market conditions and muted buyer activity keeping growth minimal. |
| Canberra | -0.5 | Canberra’s values slipped as rising stock levels and weakening demand mirrored national trends. |
Regional Markets Vs. Capital Cities
As 2024 came to a close, the contrast between regional housing markets and capital cities became increasingly apparent. While national growth slowed to a near standstill, regional markets managed to outpace their metropolitan counterparts, highlighting a divergence in housing demand and value trends. Regional housing markets demonstrated resilience, ending 2024 with an annual growth rate of 6.0%, compared with 4.5% for combined capital cities.
The clear takeaway is that regional markets continue to provide opportunities for buyers and investors seeking value and lifestyle benefits, while capital cities face ongoing affordability challenges and market recalibration.
Rental Market Overview
The rental market softened notably, with national rents rising just 0.1% in December and 4.8% over 2024, the smallest annual increase since early 2021. Despite this moderation, affordability pressures persist, with rental costs consuming a third of median household income.
- Darwin recorded the largest rise in gross rental yields – 47 basis points – to 7.9%.
- Hobart rebounded, transitioning from a -3.6% rental drop in 2023 to a 6.4% increase in 2024.
- Perth house and unit rents climbed 8.0% and 8.7% annually, respectively, although growth is tapering.
Market Forecast
Interest Rates: Financial markets predict a 25-basis-point cash rate cut by April, offering borrowers modest relief; however, additional cuts are needed to boost affordability.
Affordability Challenges: With housing value-to-income ratios reaching record highs, affordability remains a pressing issue, despite expectations that incomes will outpace property value growth.
Structural Constraints: A shortage of new housing supply and high construction costs will probably support existing property values in the short term.
Migration Trends: Easing net overseas migration may further reduce rental demand, stabilising rents.
