Australia’s property market trends showed stability this winter. According to SQM Research, the number of vacant rental properties increased nationwide in June 2024. The total number of vacant rental dwellings rose by 4,845, bringing the national vacancy count to 40,486, which corresponds to a vacancy rate of 1.3%.
Sydney
Recorded a rental vacancy rate of 1.7%, with 12,143 vacant rental properties. This marks an increase from the 1.4% vacancy rate observed the previous month. Over the past year, Sydney’s vacancy rate has remained steady at 1.7%.
Melbourne
Experienced an increase in its vacancy rate to 1.5%, up from 1.3% in May 2024. Compared to June 2023, Melbourne’s vacancy rate has increased by 0.2%.
Brisbane
The vacancy rate in Brisbane has gone up a little and has been around 1.1% since last year.
Perth and Adelaide
Both cities recorded some of the lowest vacancy rates, with Perth at 0.8% and Adelaide at 0.7%.
Canberra
Noted the highest vacancy rate among all states and territories at 2.1%.
Darwin
Darwin remains relatively low compared to other cities
Despite Stable Vacancy Rates, Australia's Property Market Trends Show Increasing Property Prices.
Even though rental vacancy rates have steadied over winter, property prices across Australia continue to climb.
According to the PropTrack Home Price Index, national home prices rose by 0.18% to reach a new peak in June, even though this was the slowest monthly growth since December 2022.
For 18 consecutive months, home prices have increased, hitting a new high in June 2024. However, the pace of growth has eased steadily since the end of the summer selling season.
Overall, prices are up 10.14% from their low in December 2022, rising 3.14% so far this year, and are 6.55% higher than in June 2023.
Population growth and tight rental markets continue to drive demand. While on the other hand, Conversely, slow-building activity worsens the housing shortage due to a lack of new construction.
This year, buyers and sellers are more confident due to the steady interest rates. The continuous rise in home prices motivates property investors to defy the affordability challenges with the expectation of further growth.
Capital Cities Continue to Drive Growth
In 2023, home prices in capital cities bounced back faster than in regional areas. This trend is still going strong in 2024. Capital cities are seeing more significant price increases, while regional areas have had smaller gains.
In June 2024, home prices in regional areas went up by 0.07%, which is 5.61% higher than in June 2023. Regional Western Australia and regional Queensland showed the most growth, with prices rising by 0.59% and 0.24%, respectively.
On the other hand, Perth continues to outperform other markets, showing the highest monthly growth at 0.65% and annual growth at 22.52%. June marked the 24th consecutive month of growth for Perth.
Following Perth, Brisbane saw a growth of 0.50%, and Adelaide grew by 0.45%. Brisbane’s prices are now 19.96% above their December 2022 low, making it the second-most expensive capital, surpassing Canberra and Melbourne. Although the growth rate in Brisbane has slowed, prices still reached a new peak in June.
Australia’s property market trends showed that, over the past two years, Perth, Adelaide, and Brisbane have seen the fastest growth rates. Perth’s prices have increased by 22.52% in the past year, while Adelaide and Brisbane have grown by 14.61% and 14.14%, respectively.
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On the other end of the spectrum, Melbourne’s recovery has been slower than Sydney and Brisbane, where prices rebounded from 2022’s declines last year. Currently, Melbourne’s home prices are stalling, having fallen for the past three months. In June, prices dropped by 0.43%, marking the third consecutive month of decline and a year-on-year decrease of 0.07%. This is the slowest annual growth since July 2023, with prices still 3.89% below their March 2022 peak.
What lies ahead for the Australian Property Market?
The supply side continues to face challenges due to low building completion rates. In the first quarter of 2024, only 41,329 dwellings were completed, compared to 43,322 properties in December 2023 quarter, a significant drop of around 2,000 properties.
This primarily suggests that:
- Property supplies will likely remain low for the foreseeable future.
- If building construction activity doesn’t improve, Australia will struggle to meet the goal of building 1.2 million new homes by 2029. The gap between the government’s target and current dwelling completion rates might widen significantly, potentially reaching around 400,000 properties or more.
- Demand is expected to continue outpacing supply, driving property prices and rents higher despite the higher interest rate environment.
This July, tax cuts increased household incomes, enhancing borrowing capacities and buyer budgets, which will further support price growth.
While home prices are anticipated to continue rising, the pace may slow during the quieter winter months, especially given the growing uncertainty about future interest rates.
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