Mona Vale Blog

Australia’s Housing Market: A Snapshot for Early 2025

Australia’s property market has entered a downturn for the first time in nearly two years, with CoreLogic data revealing a slight 0.1% national price drop in December 2024. The median property value now sits just shy of $815,000, setting the stage for a softer start to 2025.

Change in Dwelling Values:

CoreLogic property price data for December 2024 shows the first decline in national prices in almost two years.

 

Key Trends from 2024

Diverging Capital Cities: While smaller capitals like Adelaide and Perth experienced strong growth (Adelaide's median price is now ~$815,000), larger cities such as Melbourne and Sydney dragged the national average down.

Unit vs. House Growth: Units rose 3.6% in value in 2024, while standalone homes grew by 5.2%.

Interest Rates Impact: High rates (RBA cash rate at 4.35%) have stretched affordability, causing some buyers to hit their borrowing capacity ceiling.

Investor & Seller Challenges

High interest rates have made maintaining investment properties less viable for some. Many investors in Melbourne and Sydney are now offloading properties, leading to "mild" price reductions.

Despite this, investors in cities like Brisbane remain optimistic, citing strong long-term prospects despite current overhead costs like body corporate fees.

 

First Home Buyers & Wealth Transfers

First-home buyers are gaining opportunities as investors exit the market, particularly in Victoria, where one-third of recent sales were to new buyers. However, affordability remains a barrier for many, with younger Australians increasingly relying on financial help from parents.

 

Looking Ahead to 2025

CoreLogic predicts a flatlining market in early 2025, with the potential for a slight rebound if the Reserve Bank begins cutting interest rates, as some economists predict could happen by mid-year. Housing affordability and supply will remain critical issues, likely influencing the upcoming federal election.

While growth is slowing, variability across cities means the market will continue to evolve at different speeds. Buyers and sellers should stay informed and act decisively based on their local conditions.

The new year acts as a great reminder to ensure homeowners are up to date with the value of their property so they can make informed financial decisions. If you would like an obligation free sale or rental appraisal on your property, please call us today on 02 999 0800.