SYDNEY HOUSE PRICES ARE INCREASING Hugely

According to Domain’s prediction, Sydney house prices will increase sharply by up to 9%. At the same time, this increase occurred equally in other regions of Australia. So what is the cause? And what will Australian property prices look like next year? Let’s find out with My Australian Property!

1. Reasons why Sydney house prices increased sharply

Ignore the interest rate increase this year by the Reserve Bank of Australia (RBA). Sydney house prices are still expected to grow by 9% by June next year. Strong population growth, accompanied by insufficient housing, is the cause of this.

By the end of financial year 2024, the median house price in Sydney is expected to reach $1.66 million, surpassing the peak of $1.59 million set in March 2022.

Year 2024 promises to be a period of sustainable recovery for the Australian real estate market when interest rates are stable or tend to decrease.

Pressure from population combined with persistent supply shortages will drive prices up, even as interest rates are expected to show no signs of cooling this year, Domain’s head of research and economics Nicola Powell said.

“Population pressure will boost housing demand and real estate prices, especially with the increase in temporary and permanent residence permits aimed at minimizing human resource shortages.”

“This is happening at a time when the construction industry is facing unprecedented difficulties – workforce shortages, supply chain disruptions and skyrocketing construction costs. Higher construction costs have led to a slowdown across the industry and could gradually lead to rising real estate prices,” Ms. Powell said.

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2. Domain’s prediction of house prices in other areas

Domain’s forecasts are based on economic and real estate indicators such as interest rates, unemployment rates, auction success rates, number of homes for sale and similar factors,…

“By collecting this behavioral data, we can better predict market trends,” Ms. Powell said.

Adelaide, Perth and the inner cities are also expected to hit record highs, while prices will near peaks in Brisbane and Melbourne.

House prices in Adelaide are expected to increase between 2% and 5%, meaning the average house price will increase from AUD 837,000 to AUD 861,000. Between now and the end of financial year 2024, the average house price in Adelaide will surpass AUD800,000 for the first time.

“If our forecasts are successful, Adelaide could avoid any significant downturn in house prices and instead enjoy a period of strong growth compared to the boom of the past few years,” Ms Powell said.

House prices in Perth are expected to increase between 1% and 3%, taking the median house price to the latest highs of AUD 704,000 and AUD 718,000, surpassing the AUD 700,000 threshold for the first time.

It is predicted that Brisbane house prices will increase between 1% and 4%, bringing the average house price down AUD3,000 from the record high of AUD858,511 reached in mid-2022.

House prices in Melbourne are expected to increase between 0% and 2%, meaning they will remain below the record high of $1,094 million reached in December 2021.

“Even at the highest forecast of 2 per cent, Melbourne could regain a third of the value lost during the recession, which would be the slowest recovery in 30 years,” Ms Powell said.

Hobart’s house price recovery is expected to be slow and steady and it will take more than five quarters of growth to regain lost value. From now until the end of June next year, house prices are expected to increase from 3% to 5%.

Meanwhile, house prices in Canberra are predicted to increase between 2% and 4%.

The combined capitals are expected to grow between 2% and 4% while the combined suburbs are expected to grow between 1% and 3%.

Although home prices are expected to increase across regions, a number of financial factors will limit growth as interest rates rise and borrowing capacity slows, according to Ms. Powell.

“Many factors will combine in the next six months and beyond, but the construction factor will be the key driver of rising house prices.”

When interest rates fall early next year, it will signal a factor boosting real estate.

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