Australia Real Estate market sees flat national Home Prices

Get the latest insights on the Australian housing market's slow start in 2024, with national home prices remaining flat in January. Learn about the slight increase and significant slowdown in year-on-year growth according to PropTrack's Home Price Index.

The Australia real estate market has seen a slow start to 2024, with national home prices remaining relatively flat in January. According to PropTrack’s Home Price Index, there was only a slight increase of 0.02% in January, bringing the year-on-year growth to 5.26%. This marks a significant slowdown from the strong growth experienced in the middle of 2023.

Australia Real Estate market sees flat national Home Prices | PropTrack

The report indicates that strained affordability, at its worst level in at least 30 years, is likely contributing to the sluggish growth in prices. This challenge has been exacerbated by a rate rise in November 2023. However, the prospect of a more stable interest rate environment in 2024, coupled with ongoing population growth and low new building activity, is expected to provide support for prices.

Key findings from the January 2024 report include:

- National home price growth started 2024 slowly, with prices relatively flat in January (+0.02%).

- Prices across the combined capital cities were steady in January, following a very modest fall in December.

- Most regional areas saw modest price increases, with Regional SA and WA leading the way.

The report also highlights that while national home prices increased slightly in January, both capital cities and regional areas saw prices largely stable. Prices were fairly stable in most capital cities, with Perth being the only city to record notable monthly growth.

The housing market in Perth has been particularly strong, with prices up 15.45% from a year ago. This strength is attributed to record-low choice for buyers and relative affordability compared to other states.

On the other hand, Melbourne saw a decline in home prices in January, continuing the city’s soft performance since spring. Similarly, Hobart has been experiencing a downward trend in prices due to strained affordability after surging prices during the pandemic.

The report also notes that detached houses slightly outperformed units in terms of price growth in January. WA regions accounted for six of the top 10 fastest-growing regions in the past year, driven by relative affordability and a record-low stock of properties available for sale.

Looking ahead, the report suggests that while there are headwinds for home prices in 2024, such as reduced borrowing capacity due to interest rate increases, there is still an expectation of slow growth. Factors such as population growth, wage increases, low unemployment rates, and sluggish new building activity are expected to support home prices in the coming year.

The Australia real estate market has seen a slow start to 2024, with national home prices remaining relatively flat. While there are challenges such as strained affordability and interest rate increases, there are also factors that are expected to support home prices in the coming year.