House prices in Australia are projected to rise significantly in 2024

Economists predict Australian house prices will rise again in 2024 after a pandemic-driven slump, warning buyers in big cities to brace for another spike.

While Westpac experts predicted property values ​​would plummet through 2023, ANZ Senior Economist Adelaide Timbrell said continued wage increases would lead to at least a five per cent rise in property prices by 2024. and beyond.

“Once we get to 2024, we will have seen enough wage increases and a little bit of reduction in mortgage rates that, together, will create a five percent increase in home prices during that year,” he said, according to Australia Daily Mail.

Timbrell also cited the upcoming maturity of 2 percent fixed-rate mortgages between June 2023 and June 2024 as a major factor in the expected price change.

“That’s when we’re really going to start to see the impacts on household cash flow from these rate increases,” he said.

“That’s also where we’re going to see a lot more risk when it comes to backlogs and people getting a little behind.

“We see Sydney and Melbourne among the worst performers.

“People also tend to max out their borrowing capacity more often in Sydney and Melbourne because house prices are more expensive.”

The economist said reduced borrowing capacity, as interest rates continued to rise, would likely cause prices to fall in 2022 and 2023.

“Now, the drop in home prices that we’re seeing right now and will continue to see for the next 18 months has more to do with borrowing capacity than distress,” he said.

“It’s not that we expect to see a lot of houses for sale, because people can’t pay their mortgages.”

Timbrell’s prediction came after economists at Westpac told Australians to expect further price declines through 2023, with the country’s two largest cities expected to plunge 18% over the next 12 months.

Westpac economists say Sydney and Melbourne will soon see the decline, with property values ​​in the NSW capital forecast to fall 10 per cent this year and then another 8 per cent in 2023.

The report also found that Melbourne was the opposite, expected to drop 8 per cent this year and 10 per cent next.

Hobart property owners are also set to miss out, as homes in Tasmania’s capital are set to be affected by 14 per cent over the next 18 months.

In all, the author of Westpac’s August Housing Pulse report, Senior economist Matthew Hassan warned that the situation looked “grim”.

“The housing slowdown that started at the beginning of the year has accelerated and widened in the last three months,” he said.

Nationwide, property prices are still expected to fall 16 percent over the next 18 months.

There has been a “rapid change” in fortunes in New South Wales, according to the report, with a 30 per cent decline in home turnover since January, while Sydney house prices are already down more than 7 percent.

Areas in New South Wales that saw the biggest gains last year, during a time when national house prices rose by 25 per cent, must now correct themselves.

“At a sub-regional level, prices are reversing faster in the eastern suburbs, North Beaches and North Sydney, which fared better during the boom, but are holding up better in the outer western suburbs, which lagged behind. behind in the rally,” the report noted.

“Regional slowdowns have been more abrupt for Illawarra and Byron Bay.”

Victoria is not doing much better with turnover down by a third since the start of last year, although the research noted it had a “high starting point” when turnover hit a 14-year high in 2021.

House prices in Melbourne are already around 4.5 per cent below their peak and are falling between 1 and 1.5 per cent per month.

North East and Inner South Melbourne were named and shamed as the two “leading declining” areas.

According to forecasts, Hobart’s housing market is also not safe, forecast to fall 6 per cent for the rest of this year, followed by an 8 per cent drop next year.

It was slightly better for Brisbane, Perth and Adelaide, which will continue to grow through 2022. Although homes in those three cities will lose value next year, it will only be in the single digits.

ANZ house price predictions for 2024

Sydney: A 6 percent increase would see values ​​increase by $68,728 to $1,214,198

Melbourne: A 6 percent gain would see prices rise by $50,242 to $887,617

Brisbane: A 5 percent gain would see prices rise roughly $39,122 to $821,561

Adelaide: A 2 percent gain in 2024 would see prices rise $11,680 to $595,675

Perth: A 3 percent gain would see prices rise by $15,432 to $529,826

Darwin: A 3 percent gain would see prices rise by $15,210 to $522,221

Hobart: A 4 percent gain would see prices rise $26,580 to $691,085

Canberra: A 4 percent gain would see prices rise $36,229 to $941,956

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