BY HANNAH PAGE, PUBLISHED FEBRUARY 25, 2024
A HOUSING shortage will see Brisbane, Perth and Adelaide outperform their capital city rivals for house price growth in 2024, according to ANZ, which is tipping national house price growth to slow to 5% to 6% this year.
The major lender is expecting a similar 5% increase nationally in 2025 as more disposable income offsets the alleviation of the current supply shortage.
That momentum has carried through to February, with the preliminary clearance rate holding above 73% for three weeks.
“We expect capital city housing price growth of 5% to 6% in 2024 after 9.1% growth in 2023,” they said.
Brisbane, Perth and Adelaide are likely to outperform other cities due to the continued shortage of available homes, they said.
“Housing prices are at new peaks in these cities and lending in their respective states has grown stronger than other states over recent months, particularly for investors.
“Price momentum is much weaker in Sydney and Melbourne moving into 2024, perhaps due to higher sensitivity to rate increases.”
Total listings have increased sharply in Melbourne, have been relatively stable in Sydney, and continue to trend down in Brisbane and Perth.
Big four rival NAB earlier this month retained its forecast of a 5% rise in prices nationally this year and 4% in 2025. Commonwealth Bank is also predicting a 5% rise in 2024.
Demand still outpacing supply
Timbrell and Chapman said demand is still outpacing supply, and noted that residential construction activity is still well below its previous peak and demand remains strong as population growth remains elevated amid low vacancy rates and lower-than-average housing listings.
The national vacancy rate fell back to a record low of 0.8% in January, according to Domain.
“We expect housing prices to outpace construction costs this year, which could encourage more building,” Timbrell and Chapman said.
For the moment, building approvals have fallen to their lowest level since 2012.
Supply is the hot topic across the market, as the nation mulls how to alleviate the housing crisis.
https://www.australianpropertyjournal.com.au/2024/02/25/brisbane-adelaide-and-perth-real-estate-will-outperform/