High interest rates, supply constraints, and population growth drove mixed market performance across capital cities and regions
Housing affordability was the primary focus for property buyers in 2024 as rising interest rates continued to limit borrowing capacity, according to the Real Estate Buyers Agents Association of Australia’s (REBAA) annual market update.
REBAA president Melinda Jennison (pictured above) said affordability underpinned market trends across Australia’s capital cities, as high interest rates and tighter borrowing conditions shaped buyer behaviour.
“Widespread affordability challenges, rising construction costs, and a higher proportion of investors and first home buyers have driven stronger demand in lower-value market tiers,” Jennison said. “While debt servicing ratios hit record highs, population growth and constrained housing supply supported property prices.”
Jennison noted that the Australian housing market saw mixed results across capital cities and regional areas in 2024, driven by differing local market dynamics and broader economic pressures.
Sydney saw subdued growth during the year, while Melbourne recorded a slight annual decline in property values. Jennison attributed this to affordability pressures, rising property listings, and policy changes impacting buyer sentiment.
“Affordability constraints and higher advertised stock levels softened conditions, particularly in the upper price tiers of Sydney and Melbourne,” she said.
In contrast, Brisbane, Adelaide, and Perth outperformed other capitals, posting strong annual growth rates due to a mix of affordability, robust demand, and low inventory.
Stock levels played a significant role in shaping market dynamics. Sydney and Melbourne saw total property listings rise above their five-year averages, offering buyers more options and reducing urgency in decision-making. However, Brisbane, Adelaide, and Perth continued to experience low advertised stock levels, with listings more than 20% below the five-year average for this time of year.
“These conditions favour sellers in these cities, although gradual rebalancing is beginning to emerge,” Jennison said.
Looking ahead, Jennison said a potential interest rate cut in 2025 could boost buyer confidence and drive demand.
“While price growth may moderate, the imbalance between supply and demand is likely to create opportunities across capital city and regional markets,” she said. “Buyers and investors should closely monitor local trends to identify areas of potential.”
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