Mona Vale Blog

YOUR MONTHLY UPDATE - FEBRUARY

2024 saw homeowners across Australia pocket median gains of $38,000, but what does 2025 hold in store?

The past year marked another great year of price gains in Australia's property, increasing by 8.3%. However, price movements varied considerably according to location.

Sydneysiders, for example, started 2024 with a median home value of $1.128 million and finished the year with homes sitting on a median value of $1.191 million, according to CoreLogic. However, serious growth was recorded in Brisbane (values up 11.2%), Adelaide (up 13.1%) and Perth (a whopping 19.1% increase) last year.

Looking ahead, demand remains strong. Raine & Horne's data shows buyer demand is robust, with Open for Inspections up a whopping 89% YOY in December 2024, indicating plenty of eager buyers. However, property supply is constrained by factors such as government red tape, stamp duty, a shortage of skilled tradespeople and high building costs.

A rate cut as early as this month or early April could also set the stage for a strong autumn selling season.

However, early 2025 has seen a slight cooling in the housing market. In January, property prices declined for the second consecutive month, with most capital cities reporting flat or falling prices, except for Brisbane, which saw a modest gain of 0.08%. Hobart, Melbourne, Sydney, and Adelaide experienced price declines, while Perth's prices held steady - theaustralian.com.au

Despite these early signs of cooling, the Commonwealth Bank predicts a temporary fall in house prices early in 2025, followed by a recovery, ending the year with a 4% overall increase compared to 2024. Factors such as affordability issues and increased housing stock, especially in Melbourne and Sydney, contribute to the market's current state. However, 'fear of missing out' may drive market shifts if buyer appetite responds quickly to anticipated rate cuts - news.com.au

CoreLogic's Head of Research, Eliza Owen, notes that while interest rate cuts and easing inflation are expected in 2025, the impact on home values and transaction activity may be modest. Even with potential rate reductions, affordability remains a concern, with the median home value significantly higher than what a median-income household can reasonably afford.

As of February 4th, the RBA has indicated a strong likelihood of a rate decrease to 4.10%, with 95% of forecasts expecting this change and only 5% anticipating no adjustment. This prediction is based on the ASX Rate Indication Calculator.

In summary, while 2024 was a year of gains for Australian homeowners, 2025 presents a more mixed outlook. Early indications suggest a cooling market, but potential interest rate cuts and persistent demand could lead to a modest recovery later in the year. Affordability and housing supply constraints remain key factors to watch.

Whether you're planning to sell or buy in 2025, contact us to discuss your real estate goals - 02 9999 0800