Wrapping Up 2024 & Looking Ahead to 2025
Weekly Real Estate Market Update with Leigh Martinuzzi MPG
As 2024 draws to a close, it’s the perfect time to reflect on the year that’s been and look ahead to what’s in store for 2025. This year, the Australian property market once again showed its resilience, navigating economic challenges, fluctuating buyer activity, and the pressures of rising interest rates. Yet despite it all, values across many regions held firm, and in some key markets, they continued to climb.
The year’s biggest factor? The record 13 consecutive cash rate hikes. Affordability took a hit, particularly for middle-income households. CoreLogic data highlights that a fair “affordable” price point for these households sits at around $500,000. Even with anticipated rate cuts in 2025, affordability won’t change dramatically. A 1% cut might lift the affordable range to $580,000, still far below the current national median house price of $800,000.
This affordability squeeze has created varied market conditions. Cities like Melbourne experienced a decline (-2.3%), while Brisbane and Perth continued to outshine, recording annual growth of 8.3% and 21%, respectively. Regional markets also performed well, particularly in lifestyle-driven areas close to major cities. On the Sunshine Coast, annual dwelling values rose 7.8%, with quarterly growth sitting at 1.8%, according to CoreLogic.
A standout performer this year has been the luxury property market, particularly on the Sunshine Coast. The top 5% of the market has seen an impressive 55% increase in value since 2019—a clear sign of strong demand for premium lifestyle homes. Interestingly, the affordable segment has also been heating up, but properties in the $600,000 to $800,000 range are becoming harder to find. From research we conducted in-house, the most affordable suburbs on the Coast currently are Nambour, Burnside, and Kenilworth. However, as demand intensifies, even these markets could see prices climb beyond reach.
Looking forward to 2025, there’s cautious optimism. The big four banks and CoreLogic predict one or two cash rate cuts, potentially as early as the first quarter. While this will offer relief for borrowers and stimulate market activity, it’s unlikely to solve the broader affordability issue. What it will do, however, is reignite competition, particularly in high-demand areas like the Sunshine Coast.
The real challenge remains supply. Insights from Matusik reveal that we’d need to double the current rate of new housing construction to meet demand effectively. Until this shortfall is addressed, property prices for A-grade homes in desirable areas are unlikely to dip. If anything, they’ll remain steady or continue climbing. Here is an article I wrote based on some other research from Matusik on housing income and affordability.
As we step into the holiday season, remember that the market doesn’t take a break. Whether you’re buying or selling, it’s about what works for you—not trying to time the market perfectly.
If you’re thinking about your next move or just want to stay informed, let’s chat. As always, I’m here to help. Wishing you a Merry Christmas and a Happy New Year!
Don’t forget to grab your copy of my latest property e-magazine here for more insights and updates: FREE e-Magazine Here.
See you in 2025!
