Domain’s 2024 Wrap: Australian Property Market Resilience and Outlook

The Australian property market has proven its resilience in the face of economic uncertainties as 2024 comes to a close. Despite challenges like rising living costs and high interest rates, the market has defied expectations, showcasing adaptability and endurance.

Domain’s 2024 End-of-Year Wrap and 2025 Outlook offer deep insights into the market forces at play and provide a roadmap for the future. Dr. Nicola Powell, Domain’s Chief of Research and Economics, emphasized the market’s remarkable resilience, driven by chronic housing undersupply and robust population growth.

Buyer preferences have shifted, with lifestyle amenities like “pool” and “waterfront” properties topping search lists nationally. The demand for “study” spaces decreased significantly, signaling a trend change as more Australians returned to the office.

While Sydney and Melbourne saw a decline in interest for regional properties, cities like Adelaide and Perth experienced a surge in inquiries, indicating their increasing popularity. Looking ahead to 2025, Domain forecasts that Brisbane and Adelaide will likely see median house prices exceed $1 million by the year’s end, joining other major cities in this bracket.

Affordability challenges may moderate the growth pace as buyers weigh their options. Anticipated interest rate cuts could potentially stimulate buyer demand, shaping the market dynamics for the year. The upcoming federal election may bring bold housing policy reforms aimed at addressing supply and affordability issues.

As Australia’s cities face population pressures, a rise in medium-density housing is expected, with townhouses and smaller apartment buildings gaining traction, especially in middle-ring suburbs. Sustainability features like solar panels and water-saving systems are increasingly sought after, offering cost efficiency and potential price premiums.

Domain’s projections suggest continued price growth in 2025, albeit at a slower pace due to affordability constraints and expanding buyer choices. Dr. Powell expects prices to rise steadily, emphasizing the market’s ability to adapt amidst changing conditions.

The property market in Australia remains robust, presenting both challenges and opportunities for investors and buyers in 2025. Staying informed and adaptable will be key to navigating factors like interest rate cuts, policy changes, and evolving buyer preferences. The market’s resilience and adaptability continue to shape its trajectory, highlighting the need for strategic insights and informed decision-making in the year ahead.