A quick snippet on the 2024 property outlook Sent

Australia's property market started 2024 with a bang, as CoreLogic's national Home Value Index surged by 0.4% in January, marking a remarkable 12th consecutive month of value increases. While some cities like Melbourne, Hobart, and Canberra experienced slight declines, others like Perth, Adelaide, and Brisbane saw monthly rises of 1% or more.

Perth stood out as a star performer, witnessing a staggering 1.6% increase in home values in January alone, contributing to an impressive 16.7% surge over the past year. Despite this growth, Perth's housing prices remain relatively affordable compared to its counterparts, with the median dwelling value just under $677,000.

The trend of rising house values outpacing unit values continued in January, with the gap hitting a record high of 45.2%. Capital city house values have soared by 11.0% since the upswing began, showcasing Australians' growing preference for detached homes.

Regional markets also showed robust value growth compared to capital cities, with the combined regional index rising by 1.2% over the quarter. Despite affordability concerns, the volume of home sales remained above average, fueled by high migration and tight rental markets motivating renters to become homeowners.

However, variations in house price trends were noticeable on a localized scale, especially in outer areas of major capital cities, where average price increases outpaced those nearer to city centers. This disparity can be attributed to factors like affordability and the shift to remote work, which increased the demand for larger home spaces.

Peter Munckton, BOQ’s Chief Economist, speculated on the historical disparity in performance between inner and outer regional LGAs in Sydney, suggesting that Sydney's unique topography, surrounded by water and mountains, presents challenges for commuting from outer regions, unlike other major East Coast capitals.

Looking ahead, anticipated house price growth across Australia in 2024 is expected to be lower than in the previous year, primarily due to constrained household disposable income growth and ongoing job market weaknesses. While interest rate reductions are not forecasted until later in the year, the limited availability of new housing supply acts as a buffer against significant declines in house price growth. Should interest rate cuts occur earlier or be more aggressive than anticipated, it could lead to stronger house price growth.

Overall, the property market in 2024 promises to be dynamic, influenced by various factors like economic conditions, government policies, and demographic shifts, shaping the preferences of both buyers and sellers.