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© Reuters. Residential homes can be seen in the inner west suburb of Enmore in Sydney, Australia, July 19, 2015. REUTERS/David Gray/File Photo
Exciting news out of Australia – home prices surged last year, marking a significant turnaround from the 5% dip seen in 2022. However, the pace of growth slowed in the final months of the year due to interest rate hikes and persistent cost of living pressures.
Figures from property consultant CoreLogic out on Tuesday showed prices nationally jumped 8.1% in 2023, but well below the 24.5% surge recorded in 2021. Prices in December nudged higher by 0.4%, the smallest monthly gain since February.
Notably, Sydney boasted a 11.1% annual rise but were still 2.1% below their January 2022 peak, with a median home value of just under A$1.13 million ($769,530).
Most other cities surged, with Perth up 15% and Brisbane 13%, while Melbourne prices rose only 3.5%.
The housing market has faced challenges, including higher rates and inflation, affordability challenges, rising advertised stock levels and low consumer sentiment, which have taken some heat out of the market through the second half of last year, according to CoreLogic analysts.
This trend is expected to continue into the first half of 2024, according to CoreLogic Research Director Tim Lawless.
The trajectory of interest rates through 2024 will be a key factor influencing housing trends, although another rate hike is “looking increasingly unlikely,” Lawless said, adding any rate cuts could help stoke demand later in the year. “If interest rates do move lower, there is a good chance we will see a lift in consumer sentiment and a more positive trend in housing activity and values through the second half of the year.”
($1 = 1.4684 Australian dollars)