Australians ringing in the new year could see a small drop in the value of their homes, new property data has revealed.
According to CoreLogic research, a continuation of the “drag” in buyer demand could occur in early 2025, potentially resulting in a small drop in national home values in the first part of the year.
The report notes that a drop in interest rates by the Reserve Bank in 2025 could increase demand among potential buyers.
“The implementation of stage 3 tax cuts from July this year showed an anemic response in the housing market, and national home value growth continues to slow,” it reads.
It says the slowdown in rental growth recorded in 2024 is also expected in 2025, as demand remains constrained due to high cost of living constraints.
Any increase in unemployment in 2025 may disproportionately affect households that rent, as they tend to be younger people or less skilled workers with more precarious working conditions.
But in the face of high interest rates and global uncertainty, the Australian property market demonstrated “surprising resilience” throughout 2024, the report said.
House prices could fall in 2025 if the buyer score continues to “creep”
It found that the number of homes had increased by eight per cent on the previous year.
The total number of home sales reached 528,000 nationally in the 12 months to November, an increase of six per cent on the previous five-year average.
Home values saw a 5.5 per cent increase over the same period, with the combined value of Australian homes exceeding $11 trillion.
CoreLogic head of research Eliza Owen said the market’s initial strength in 2024 gradually eased due to declining demand, rising announced supply levels and a changing outlook for inflation and interest rates.
The top 10 national sales for 2024 skewed towards the country’s east coast and included Sydney’s eastern suburbs along with Melbourne’s Toorak.
Across all capital markets, Perth dominated the list for fastest growth in home values.
All suburbs recorded growth of 30 per cent or more over the year.