Impacts vary across regions and price segments
The prolonged period of high interest rates is weighing heavily on Australia’s residential property market, according to Herron Todd White’s (HTW) latest monthly review.
Kevin Brogan (pictured above), national director of group risk and compliance at Herron Todd White, said the combination of elevated borrowing costs and a slowdown in transaction activity is reshaping market dynamics across the country.
“Transaction activity has slowed significantly at the same time as the spring selling season is bringing extra supply to the market,” Brogan said. He explained that an influx of new listings, combined with fewer sales, is increasing total housing stock, which is putting downward pressure on prices.
Indicators such as auction clearance rates and vendor discounting show softening demand. Marketing periods have also lengthened, suggesting that buyers are taking longer to make purchasing decisions.
Brogan said that the effects are not uniform across all market segments. In areas with limited supply, new listings may not outpace demand, which could prevent a significant drop in prices. However, in regions with a surplus of stock, price growth is slowing or even reversing.
The prestige residential market, while traditionally resilient, is also feeling the pinch. In Sydney, 2023 was a strong year for luxury property sales, but activity has slowed in 2024, with fewer transactions recorded in prime locations.
“Prestige property buyers have become less active, and sellers are hesitant about listing in a slowing market,” Brogan said. Despite this, trophy homes continue to generate headlines, with notable sales highlighting the enduring appeal of high-end real estate.
In October, the Point Piper mansion Elaine reportedly equalled Australia’s house price record with a $130 million sale. The historic harbourfront property, built in the 1860s and previously owned by the Fairfax family, last sold for $71 million in 2017.
Meanwhile, Brisbane’s prestige market has shown more resilience, driven by tight supply in desirable areas. Off-market transactions are becoming more common as buyers actively pursue properties that are not officially listed. Recently completed or renovated homes are commanding premium prices as buyers avoid the costs and delays associated with construction.
One standout sale in Brisbane was Mimosa, a property in Hawthorne that sold for $20.25 million in October. It is among the 86 prestige transactions in 2024 that exceeded $5 million, with 31 additional high-value sales currently under contract.
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