Australia could be set for a sizzling summer property market, as the prospect of potential interest rate cuts in 2025 revs up buyers and their homeownership dreams.
During summer, real estate activity tends to slow down in December and then pick up again after the Christmas and New Year break.
But this summer could be different. Homeowners and buyers continue to watch for any signs of interest-rate cuts, with an initial cut largely expected in the first half of next year.
Interest-rate cuts will give money back to households, which could drive home prices even higher than they already are.
REA Group senior economist Eleanor Creagh said summer was a seasonally slower time of year for the property market.
“That being said, home prices have continued to rise for almost the past two years straight, and it’s likely that the lift in home prices is going to continue next year, when market activity begins to pick up as people come back from the holidays,” Ms Creagh said.
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Home prices are likely to rise at a slower pace throughout this summer. Picture: Getty
“But prices are likely to rise at a slower pace towards the end of the summer relative to the previous summer.
“We know that affordability constraints are ever present, interest rates have been sustained at high levels, and there’s a lot more properties to choose from due to more stock arriving onto the market throughout spring.”
Home prices and property market conditions vary greatly across the capital cities, so we’ve gathered the latest real estate outlooks for each Australia city.
Sydney summer outlook
Sydney home prices are likely to continue moderating throughout summer, according to Ray White head of research Vanessa Rader.
“Prices will moderate until we start seeing those interest rate reductions happen, and that might fuel a bit of a different situation,” Ms Rader said.
“But until that time, I think prices will stay steady or grow only ever so slightly because there is still demand out in the marketplace, and there’s some markets that are performing better than others.”
Sydney home prices have increased more than 5% over the past year. Picture: Getty
Ms Rader said they were seeing continued price growth at the more affordable end of the market, driven by first-home buyers getting into the market.
“We’ll probably see a lot more of those first-home buyers getting back into the market in the new year, particularly anticipating that reduction in interest rates,” she said.
“They’re seeing some value in the market at the moment because those prices haven’t continued to escalate as quickly as they have been, so I think we’ll see a few more transactions there.”
Brisbane summer outlook
The Brisbane market is set to see a steady flow of buyer activity from interstate and expat buyers throughout December, according to Alex Jordan from McGrath Estate Agents – Paddington.
“It’s a common theme in real estate here to see strong buyer activity, particularly with interstate and expat buyers, leading up to the end of the calendar year,” Mr Jordan said.
“I’ve recently done transactions buyers from NSW, Victoria and Singapore.
Brisbane home prices have grown by more than 12% over the past year. Picture: Getty
“We’ve still got a good run between now and early next year because the Brisbane market is still in short supply compared to Sydney and Melbourne, and we’re seeing better buyer activity than our southern state neighbours.
“Brisbane is likely to continue to outperform other capital cities in the current trend.”
Mr Jordan said the market has been active at all price points, but there had been a very strong flow of buyers that were still looking and waiting for product to come up in the $1 million to $2 million price range within the inner-city suburbs.
Melbourne summer outlook
Melbourne is set to kick off the summer selling season will good buyer energy, according to Jellis Craig chief executive Andrew McCann.
“We’re confident that the market will commence with fairly good energy because weve seen an increase in buyer inspection numbers across the group in November compared to October,” he said.
“We think that the buyer pool has been replenished, and they are keen to see what stock is available in the new year.
“Our office group is taking the initiative to release more property earlier in the new year, so we’ll be seeing a bit more stock released in the early part of January rather than the late part to try and take advantage of the active buyer pool.
New listings in Melbourne were over 12% higher in October compared to a year ago. Picture: Getty
“I wouldn’t say that we’re aggressive or bullish, but we think that the market has shown good momentum to complete the year.
“We’ve listed well for the new year, and we’re expecting it to be a fairly good start.”
Jellis Craig is set to disrupt the industry’s traditional holiday shutdown period by strategically launching new property listings on Boxing Day.
“The days between Boxing Day and early January are no longer downtime for the market,” Mr McCann said.
“We have observed a significant increase in buyer activity during this period, and we want to give our sellers the best possible chance to maximise their sale value before the rush of listings that typically enter the market in February.”
Adelaide summer outlook
Adelaide has seen some of the strongest home price growth across the country in recent years, and that’s likely to continue throughout summer, Ms Creagh said.
“Adelaide is likely to remain one of the stronger performing capital cities despite the pace of price growth slowing,” she said.
“Prices are up almost 15% year on year.”
“Even though the number of properties hitting the market has increased throughout the spring selling season, total stock on market still remains pretty constrained, relative to historic average levels.
Adelaide home prices have increased almost 15% over the past year. Picture: Getty
“New listings are still being absorbed quickly, with buyer demand remaining strong in Adelaide.
“We expect that home price growth in Adelaide is going to continue slowing given affordability constraints are in play.
“The sustained higher interest rate environment is likely weighing on buyers, but prices are expected to lift as the summer selling season closes out and Adelaide is likely to remain one of the stronger performing capitals despite the pace of price growth slowing.”
Perth summer outlook
LJ Hooker head of research Mathew Tiller said Perth property-price growth would remain strong this summer, driven by tight supply, high population growth, and strong rental demand.
“While new listings have begun to increase, the market remains undersupplied, giving sellers an advantage in most areas,” Mr Tiller said.
“Buyers are benefiting from slightly more choice compared to last year, but competition is still fierce, especially in growth regions like the outer north and south-eastern corridors, where infrastructure projects such as Metronet are improving connectivity.
Home prices in Perth have jumped by more than 20% over the past year. Picture: Getty
“For sellers, the coming months present an excellent opportunity to capitalise on recent price growth and strong buyer demand.
“Looking ahead to 2025, potential interest rate cuts are expected to improve borrowing capacity and cement buyer demand.”
Perth’s median home price grew by more than 20% to $773,000 during the year to October, reflecting the country’s strongest capital city price growth. Perth home prices have grown by 79% since March 2020.
Hobart summer outlook
Hobart’s real estate market conditions started to recover during spring, and that recovery is likely to continue into summer, Ms Creagh said.
“We’ve seen that home prices in Hobart have begun to turn around after being in a two-and-a-half-year downturn,” she said.
New listings in Hobart were 9.4% higher in October than a year ago. Picture: Getty
“The market conditions in Hobart look to have recovered somewhat throughout the spring selling season, and we’d expect that recovery to continue into next year, with the prospect of interest rate cuts likely buoying sentiment and market activity.”
Hobart’s median home price has declined 0.93% to $683,000 over the past year, however the median price was still 35.6% higher than before the pandemic.
Canberra summer outlook
Canberra is likely to see slower home price growth throughout the summer period, according to Ms Creagh.
“Canberra has been one of the weaker performing capital city markets, with home prices staying relatively flat over the past year,” she said.
“Canberra has seen a lift in stock on market in spring, which has given buyers a lot more choice and a lot more time to make their purchasing decisions.
New listings in Canberra were 19% higher in October than a year ago. Picture: Getty
“It’s likely that this slower pace of growth is going to continue in Canberra, as the summer selling season closes out.”
While annual price growth has been flat, Canberra’s median home price was still 36% higher than before the pandemic.
Darwin summer outlook
Darwin is set to see moderate home price growth during summer, similar to the past year, Ms Creagh said.
“It’s likely that that the summer conditions in Darwin are going to remain relatively similar to what we’ve seen over the past year,” she said.
“Prices in Darwin have lifted over the past year, although they’ve lifted at a pretty moderate pace relative to other capital city markets.
Darwin home prices have grown almost 1.5% over the past year. Picture: Getty
“Darwin remains the cheapest capital city market in Australia, and prices are almost 30% cheaper than Hobart, the second least expensive capital city market.
“But despite that, the comparative affordability conditions in Darwin haven’t been as robust as Brisbane, Adelaide and Perth.”
Darwin’s median home price rose 1.46% to $512,000 over the past year, and was 27.4% higher than before the pandemic.
