The housing markets of two major Aussie cities have fallen in value. Picture: Sarah Matray.
The value of Australia’s housing market has reached a record high of more than $11 trillion, despite two of its biggest cities suffering.
But buyers advocates believe interest rate cuts could cause a “rebound” for Melbourne and Sydney in the near future to take the nation’s property wealth to an even more mind boggling value.
The total value of residential dwellings across the country rose by 0.2 per cent to $11.032 trillion in the final three months of 2024, according to new data released by the Australian Bureau of Statistics (ABS) on Tuesday.
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With Australia’s Gross Domestic Product only $1.881 trillion, according to the International Monetary Fund, the nation’s housing wealth is currently almost 5.9 times the size of its own annual economic output.
The number of dwellings around the country also rose, reaching almost 11.3 million in the same quarter.
Total values varied across the country, however, with New South Wales and Victoria dropping 0.4 and 1.1 per cent respectively. Meanwhile South Australia recorded a significant 2.4 per cent rise.
Real Estate Buyers Agents Association of Australia president Melinda Jennison said the “divergence” in performance across the nation was significant.
The total value of residential dwellings in New South Wales dropped by 0.4 per cent at the end of 2024. Picture: Monique Harmer.
“What we are seeing is that there are some locations such as Sydney and Melbourne, for example, where prices have actually declined over the last quarter of 2024,” she said.
“Whereas there’s been other markets, which are inclusive of Adelaide, Brisbane, and Perth, where prices have continued to escalate despite the broader macroeconomic conditions being similar across all of the nation.”
ABS head of finance statistics Dr Mish Tan said the variation was consistent with results across the year.
“Growth in the value of dwellings by state continues to diverge, reflecting a variation in local market conditions,” she said.
Ms Jennison said a supply and demand “imbalance” in smaller capital city markets had driven the total value of residential dwellings, with greater competition resulting in price escalations.
“The number of property listings available for sale has been consistently lower in Adelaide, Perth, and Brisbane compared to the long term averages for those particular cities,” she said.
“Whereas in Sydney and Melbourne, the number of the total property listings available for sale is actually now more in line with long term averages, so there’s actually more stock.”
Buyer’s agent Melinda Jennison said a supply and demand “imbalance” in smaller Australian capital cities had led to price escalations. Picture: Supplied
However, Ms Jennison expected markets like Melbourne and Sydney could “rebound” as a result of recent interest rate cuts.
She said while Melbourne had experienced some “headwinds”, such as government policy changes and land taxes impacting the market, data released this year showed the city has had a “strong” rebound in terms of price growth.
“It is possible that the bottom of the market has now passed, and Melbourne is potentially now on an upward trajectory,” she said.
“But it is too early to tell whether that’s a sustainable trend or not.”
Dr Tan added annual national growth had slowed to 4.4 per cent from 8.1 per cent in December quarter 2023.
“The relatively flat growth for the December quarter (2024) was the result of net additions to stock offsetting a slight fall in property prices,” she said.
Ms Jennison anticipated Melbourne could “rebound” as a result of recent interest rate cuts. Picture: iStock
The new ABS data also revealed the average price of residential dwellings in Australia dropped to $976,800 in December quarter 2024.
New South Wales maintained its position as the most expensive state, with a mean house price of more than $1.2 million.
The ACT followed at $956,800, with Queensland coming in third with a mean price of $923,600.
The Northern Territory was the most affordable state or territory, with an average house price of just over $500k.
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