Navigating the Shifts in Australian House Price Trends: Expert Insights for 2024 Home Buyers and Investors

Seeking the latest on Australian house price as we approach 2024?

With varying regional trends and economic factors at play, we examine the up-to-the-minute dynamics of the Australian house price market, offering a snapshot for prospective buyers and investors.

Learn what drives current prices and how they might shift in the near future, right here.

Key Takeaways

  • Australian property markets, especially in capital cities, showed mixed trends in 2024, with Sydney remaining the most expensive and showing growth, while Melbourne experienced dips and Perth surprised with strong growth.
  • Rising interest rates have led to increased mortgage stress in Australia, with future hikes potentially impacting house prices by decreasing demand, with potential strategies in place to mitigate these effects.
  • The Australian rental market has tightened due to factors such as high immigration and low vacancy rates, exacerbating the rental crisis and affordability, with government and social housing initiatives attempting to alleviate the situation.

The State of Australian House Prices in 2024

Exploring the Australian property market in 2024 reveals it’s evident that the terrain is a mixed bag. The national median property value sits at $753,654, marking a period of sustained decrease over the previous six months, including a -1.2% decrease in October. However, the property markets in capital cities have shown resilience, with asking prices for combined dwellings experiencing a 1.3% increase leading up to December, and an impressive 8.5% increase throughout the year. This trend in Australian property prices showcases the strength of capital cities’ property markets.

Yet, a closer examination reveals distinct trends emerging in different regions.

Sydney: The Most Expensive City

Sydney, the city known for its iconic Opera House and Harbour Bridge, holds another distinction – the most expensive city to buy property in Australia. With a median house value of nearly $1.4 million, Sydney’s property market has seen a notable increase in house price growth, with a 1.7% rise in June and a total growth of 6.7% since January. This trend reflects the high demand and low supply dynamics characteristic of this bustling metropolis.

Even within this expensive landscape, a clear divide is apparent. The median house price in Sydney stands at a staggering $1,397,366, while the median unit value comes in at a slightly more affordable $836,220. Despite these high prices, property investors are not retreating. But there’s a sense of caution in the air, with predictions suggesting a possible decline in Sydney’s housing market as soon as next month.

Melbourne: A Slight Decrease in Prices

Heading south from Sydney to Melbourne, the property market narrates a slightly different tale. Over the past year, Melbourne’s property market has seen:

  • A slight dip, attributed to rising advertised stock levels, worsening affordability, and persistently low consumer sentiment.
  • A significant surge in property prices, with a historic boom of over 17% in 2021.
  • A turbulent market in 2022.

Despite these hurdles, Melbourne’s property values, including house and unit prices, have witnessed a 0.7% increase in the recent period, suggesting a modest rise in house prices. This dynamic of fluctuating prices, coupled with the city’s vibrant culture and stable economy, continues to draw investors and home buyers alike.

Perth: Surprising Growth in the West

Taking a turn to the west coast, Perth’s housing market unfolds an entirely different narrative. Known for its beautiful beaches and laid-back lifestyle, Perth is now gaining attention for its booming property market. Despite minor price drops in October, the city has demonstrated substantial growth, surpassing that of major cities such as Brisbane and Sydney.

In fact, Perth experienced the highest surge in property prices in recent months, a trend that has caught the eye of many property investors. The city’s strong economy, coupled with increasing demand for housing, has created a favourable environment for both home buyers and investors.

Impact of Interest Rates on Australian Property Market

Digging deeper into the Australian property market, the impact of interest rates becomes increasingly apparent. Recent hikes have significantly increased financial pressure on Australian households, leading to a record level of mortgage stress. As of mid-2023, around 5% of owner-occupiers found their essential expenses and mortgage costs surpassing their income.

If interest rates continue to rise, it is possible that Australians may need to allocate up to 40% of their income towards home and other loans. This intertwining of interest rates and property prices forms an intricate dance that shapes the market dynamics.

Mortgage Stress and Affordability

Mortgage stress levels in Australia are at an all-time high. Ongoing economic uncertainty, inflation, rising interest rates, job loss, an increase in living expenses, and high levels of debt are all culminating in a perfect storm of financial pressure. As property prices rise, the dream of homeownership seems increasingly elusive for many Australians.

The rising house prices exacerbate mortgage stress by creating obstacles for first-time buyers and by increasing the financial burden on existing homeowners. As mortgage repayments become more demanding, the repercussions echo throughout the economy, affecting consumer spending and overall economic growth.

How Future Rate Hikes Could Influence House Prices

Looking ahead, future interest rate hikes could further influence house prices, potentially placing downward pressure on the market. When interest rates increase, the purchasing power of potential buyers diminishes, creating difficulties in obtaining loans and reducing the demand for houses. Consequently, this can result in:

  • a slowdown in property price growth
  • longer time on the market for houses
  • decreased competition among buyers
  • potential decrease in housing sales

However, it’s not all doom and gloom. There are strategies that can lessen the impact of interest rate increases on Australian house prices. These include:

  • Fixing the interest rate for a specific duration
  • Conducting thorough research and rate comparisons
  • Being open to compromises in property selection
  • Considering properties with high rental demand for income generation.

Rental Market Dynamics and Their Effect on House Prices

In the complex puzzle of Australia’s property landscape, the rental market dynamics are another piece that shapes the overall picture. Here are some key trends in the rental market:

  • Rental values have seen a rise in over 90% of Australian markets in the previous year, leading to annual increases for many tenants.
  • Asking rents are on the incline.
  • Vacancy rates are at an extremely low level.
  • Rental markets are showing signs of tightening nationwide.

These factors, along with others, play a significant role in determining house prices across the country.

Tightening Rental Markets

The tightening of rental markets in Australia is being propelled by several factors, including:

  • High immigration rates
  • Low vacancy rates
  • Increasing asking rents
  • The pandemic, which has led to a worsening situation for renters in every capital city compared to 2019, with notable increases in rent values raising concerns about affordability.

This tightening of the rental market has real-world repercussions for the most vulnerable renters in Australia. Particularly for pensioners and single parents, the tight rental market crisis has made finding affordable rental options a significant challenge. To meet this escalating demand, an additional 127,000 dwellings are anticipated to be necessary this fiscal year alone.

Addressing the Rental Crisis

Addressing the rental crisis requires a multifaceted approach. Private investors, who account for approximately 84% of all rental accommodation, play a crucial role in Australia’s rental market. Rental assistance programs, such as the Commonwealth Rent Assistance (CRA), are also vital in alleviating rental stress.

Additionally, social housing initiatives offer affordable rental options to low-income individuals and families, thereby helping to increase the availability of affordable rentals and decrease the demand for limited options. Measures such as the Backyard Home Initiative and the establishment of a National Housing and Homelessness Plan, as well as interventions like rent control measures and encouragement of affordable housing developments, are all currently in place to facilitate access to secure and affordable housing for Australians.

Find out your borrow capacity

Opportunities and Challenges for First Home Buyers in 2024

Turning our focus to first home buyers in 2024, it’s clear that they face a unique set of opportunities and challenges. From the need for financial assistance from parents to the challenge of saving for a deposit, first home buyers encounter several obstacles on their path to homeownership. Despite these hurdles, government grants and assistance programs offer a glimmer of hope.

Government Grants and Assistance

Several grants and assistance programs have been implemented by the government, targeting first home buyers to facilitate their entry into the market. The Help to Buy Scheme is one such initiative, enabling eligible buyers to co-purchase a home with the government, providing a guarantee of 30% of the equity for an existing home or 40% for a new home.

However, to be eligible for these grants, potential homeowners must meet specific criteria, including being 18 years or older, never having owned property in Australia, and being a permanent resident or Australian citizen. While these grants have been designed to offset the effects of the GST on homeownership, affordability remains a concern.

Strategies for Saving for a Deposit

The first major hurdle often encountered by aspiring homeowners is saving for a deposit. Effective strategies such as:

  • Tracking expenses
  • Finding additional sources of income
  • Keeping savings separate from daily spending
  • Utilizing online savings accounts

A strong borrowing capacity can help potential homeowners, including mortgage holders, build their deposit, as the reserve bank plays a crucial role in determining interest rates.

In addition to solid budgeting practices, reducing expenses can also contribute significantly to saving for a house deposit. By eliminating unnecessary renting, maintaining discipline in day-to-day spending, and segregating savings from regular cash flow, first home buyers can incrementally increase their savings over time.

For those struggling to secure a deposit, alternative financing options, such as government schemes, obtaining loans from parents, or utilizing rent payments towards a deposit, may be worth considering.

Property Investment Outlook for 2024

Looking ahead to the property investment outlook for 2024, the landscape appears promising, albeit with a few clouds on the horizon. From tax deductions and incentives to identifying the best locations for property investment, potential investors have several factors to consider.

Tax Deductions and Incentives

Property investment can be made more appealing through tax deductions and incentives, especially in regions like Perth, where the market is booming. These incentives offer financial advantages and reduce the expenses associated with property investment, such as mortgage interest, property management fees, and repairs and maintenance.

The tax incentive scheme for property investment in Australia has undergone changes, with the introduction of new incentives as of April 2023, aimed at boosting housing supply. In Perth, property investors can avail of the following tax deductions:

  • Depreciation
  • Capital works depreciation (Division 43)
  • Repairs on the investment property
  • Interest charged on loans used for investment purposes.

Best Locations for Property Investment

The decision of choosing the right location for property investment is crucial and can significantly influence an investor’s returns. In 2024, Perth, South Australia, and Tasmania are among the sought-after locations for property investment. Forecasts suggest promising returns for property investments in these regions.

For instance, Adelaide’s home values are forecasted to increase by 6.2%, closely following Brisbane’s growth, while Perth leads with an expected increase in house prices of 13 to 18 percent. Additionally, the current rental yield in Perth is 3.9% for houses and 5.4% for units, further enhancing its appeal as a desirable location for property investment in terms of rental demand.


Navigating the Australian property market in 2024 is no easy task. With varied trends in different regions, the impact of interest rates, rental market dynamics, and the unique opportunities and challenges for first home buyers and investors, understanding the terrain is crucial. However, armed with comprehensive insight into the market, a clear strategy, and an eye on the horizon, both home buyers and investors can confidently navigate the intricate landscape of the Australian property market.

Frequently Asked Questions

What is the current average house price in Australia?

The current average house price in Australia is approximately 930,600 AUD.

What is the current state of the Australian housing market in 2024?

The Australian housing market in 2024 shows a mixed picture, with a sustained decrease in property prices over the past six months, yet the national median property value stands at $753,654 and asking prices for combined dwellings in capital cities have increased by 1.3% leading up to December.

How are interest rates affecting the Australian property market?

The recent interest rate hikes have led to a record level of mortgage stress in the Australian property market, with households facing increased financial pressure and potentially needing to allocate up to 40% of their income towards home and other loans. This could have significant implications for the property market.

What is the rental crisis in Australia?

The rental crisis in Australia is driven by high immigration rates, low vacancy rates, and increasing asking rents, making it significantly challenging for vulnerable renters, especially pensioners and single parents.

What challenges do first home buyers face in 2024?

In 2024, first home buyers continue to face challenges such as the need for financial assistance from parents and the difficulty of saving for a deposit. However, there are relief options available through government grants and assistance programs.