2024 Year-End Real Estate Market Review: Looking Ahead to 2025
As we close out 2024, the real estate market has been a study in contrasts, with conditions varying greatly across regions. *CoreLogic's Head of Research, Eliza Owen, captured this uncertainty, stating, “The market's initial strength in 2024 gradually waned due to declining demand, rising levels of advertised supply, and a shifting outlook for inflation and interest rates.”
The key theme of 2024 has undeniably been variability. Growth conditions have ranged widely, with annual value changes from a -2.3% decline in Melbourne to a 21.0% increase in Perth. The weakest performers among capital city house suburbs for value growth were concentrated in Melbourne, with six of the bottom performers in the city. Interestingly, Millner in Darwin topped the list of the worst-performing suburbs, with values dropping by -11%. Similarly, nearly all of the top 10 worst-performing unit markets were found in Melbourne.
In regional areas, Venus Bay in Victoria experienced the steepest house value decline at -15.4%, while Greater Melbourne’s Sunshine units saw the biggest drop in unit values at -13.8%. Despite these challenging market conditions, Ms. Owen pointed out the potential for a rebound, noting, “There are tailwinds for households that could boost buyer and renter demand in 2025.”
What Lies Ahead in 2025
Looking to 2025, several positive factors that may support the market. Wages growth remains well above the pre-COVID decade average, at 3.5% as of September. The Stage 3 tax cuts have further boosted real household income, although much of this boost has been saved by households for now. With inflation expected to ease and real household income likely to grow further, 2025 could see market conditions improve, particularly if there is a reduction in the cash rate.
However, as always, market performance will be diverse. While conditions are expected to improve, the direction for the housing market on the Peninsula will likely be driven by speculation and lifestyle choices. The impact of recent state government taxes and rental law changes have certainly made their mark, and we remain hopeful that 2025 will bring some much-needed relief, such as a softening in inflation, interest rates, and possibly utility prices stabilizing.
Looking to the Future: Opportunities on the Horizon
For those considering a sale in 2025, the ‘change over figure’ remains a key focus. Opportunities exist for both buyers and sellers, and it’s crucial to keep in mind that the most important decisions aren’t just about what to do now, but also what comes next. Whether you’re looking to upgrade, downsize, or make a move based on lifestyle choices, 2025 offers potential for strategic decisions.
We continue to be here for all your real estate needs, whether you’re planning to buy or sell in the new year. We’re committed to guiding you through the process and providing insights, to help you make informed choices with data and expertise.
Wishing You a Merry Christmas and a Happy New Year
As the holiday season approaches, we want to take a moment to wish you all a very Merry Christmas and a Happy New Year. May this festive season be filled with love, joy, and happiness, surrounded by those who matter most. And with summer finally feeling like it might arrive, we encourage you to enjoy the best that the Peninsula has to offer and make lasting memories.
As always, we’re here to chat about all things real estate. If you’d like to discuss planning your sale or purchase in 2025, don’t hesitate to reach out.
Warmest,
Sam & Narelle Crowder
John Wickham & Crystal Wishart
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