Australian Home Prices Expected to Rise by 5.0% in 2024, Despite Central Bank’s Interest Rate Hike Warning



Property analysts predict a 5.0% increase in Australian home prices for 2024, despite central bank hints at a possible interest rate hike. Stay informed on the latest housing market trends.

Property analysts are projecting a 5.0% increase in Australian home prices for the year 2024, according to a recent Reuters poll. Despite recent comments from the central bank hinting at a possible interest rate hike before the end of the year, analysts remain optimistic about the housing market. 


Australian Home Prices Expected to Rise by 5.0% in 2024, Despite Central Bank's Interest Rate Hike Warning

During the pandemic, average house prices saw a 25% surge before dropping 9% from their peak. However, prices have since rebounded, nearly recovering all losses from last year. The Reserve Bank of Australia raised the cash rate to a 12-year high of 4.35%, but is expected to maintain this rate well into the second half of the year. 

The high cost of homes continues to be a barrier for many first-time buyers. Factors such as a low jobless rate, high wage growth, and an increase in immigration are expected to drive prices up, albeit at a slower pace than in previous years. Since the 2008 financial crisis, home prices have nearly doubled.

A recent survey of 14 property analysts conducted by Reuters from Feb. 16-28 revealed that the average home prices are likely to increase by 5.0% in 2024, unchanged from the previous poll in December. Forecasts for 2025 show a further increase of 5.0%, up from 3.9% in the previous poll.

Starting July 1, high-income earners will face higher taxes, while low-income households struggling with the rising cost of living will see a decrease in taxes. The combination of rock-bottom interest rates during the pandemic and a shortage of housing supply has driven up housing prices, forcing many first-time buyers to turn to the rental market.

When asked about affordability for first-time homebuyers in the coming year, opinions were divided among analysts. Six out of 10 analysts believe affordability will worsen, while the remaining four predict an improvement. Additionally, five out of eight respondents expect a decrease in the proportion of home ownership compared to renters in the coming year.

Looking ahead, analysts anticipate a widening gap between the demand and supply of affordable homes over the next 2-3 years. The majority of analysts believe that this gap will continue to grow, with only a few predicting a modest narrowing.

Despite the challenges faced by first-time homebuyers and the uncertainties in the housing market, property analysts remain optimistic about the future of Australian home prices.

Australian Home Prices Expected to Rise by 5.0% in 2024, Despite Central Bank’s Interest Rate Hike Warning

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