Looking ahead to the 2024-25 financial year, national prices are projected to rise between 2% and 5%, with capital cities expected to see a slightly higher increase of 3% to 6%. Mr. Kusher noted that the anticipated prolonged period of higher interest rates could reduce buyer activity. However, upcoming tax cuts in the new financial year are expected to increase disposable incomes and enhance borrowing capacities.
“These tax cuts have the potential to further drive up housing prices,” he stated. “Some models suggest they will be equivalent to at least two 25-basis point interest rate cuts.”
“As we approach early 2025, the likelihood of interest rate cuts may increase, potentially stimulating more buyer demand and further driving up prices.”
Mr. Kusher also mentioned that new dwelling commencements and completions are expected to remain weak, leading to increased demand for established properties. Additionally, a tight rental market is likely to encourage more people to purchase property.
“We anticipate that price growth by the end of the 2024-25 financial year will be slightly stronger than what is expected by the end of the current calendar year, with a shift in the growth profile,” he said. “We expect slowing price growth in several capital cities but an uptick in the larger markets of Sydney and Melbourne.”
The strongest price growth is forecasted for Perth, with prices expected to rise between 8% and 11% over the 2024-25 financial year. Adelaide is projected to see a price increase of 5% to 8%, while prices in Sydney, Melbourne, and Brisbane are predicted to rise by 3% to 6%.
Growth is expected to be slower in the smaller capitals: Canberra (2% to 5%), Hobart (0% to 3%), and Darwin (1% to 4%).
4o
