Real Estate Wrap with Leanne Pilkington | 16 December 2024
Welcome to this week’s Real Estate Wrap with Leanne Pilkington, CEO of Laing+Simmons and President of the Real Estate Institute of Australia.
As 2024 draws to a close, the property market continues to reflect seasonal trends and a cooling demand influenced by higher interest rates. Here’s a summary of the key takeaways.
Auction Activity Slows Further
This week saw 816 Sydney properties go under the hammer, down from 927 last week, with a preliminary clearance rate of 63%. Across the combined capitals, auction volumes dropped to 2,215, marking the quietest week since early November. Melbourne led the pack with 1,003 scheduled auctions, followed by Sydney with 814. Regional markets like Newcastle performed strongly, achieving a 75% clearance rate, while Baulkham Hills and Hawkesbury in Sydney topped the charts at 77.3%.
A Year of Waning Demand and Rising Supply
CoreLogic’s Best of the Best 2024 report revealed that despite high interest rates, national home sales rose by 8% this year, with a total of 528,000 sales, exceeding the five-year average by 6%. Home values increased by 5.5%, taking the combined value of Australian homes to over $11 trillion.
However, market conditions have slowed, with November’s Home Value Index rising just 0.1%. Perth led value growth, with suburbs achieving over 30% increases, while Melbourne and Darwin saw declines. Buyers have been gravitating towards more affordable segments, with the bottom quartile of the market outperforming higher price ranges.
Looking Ahead to 2025
As the market winds down for Christmas, all eyes are on the year ahead. Analysts predict a small decline in national home values in early 2025 before a potential inflection point in the second half of the year, driven by expected rate cuts.
However, affordability challenges remain significant, with the median affordable purchase price at $507,000 compared to the current national median of $813,000. New housing construction is expected to remain subdued, potentially supporting home values.
Wages growth, easing inflation, and tax cuts may provide some relief to households, creating opportunities for improved buyer and renter demand. That said, considerable diversity in market performance across regions will persist, with Perth and Adelaide potentially easing, while Melbourne and Hobart could see slight value increases.
Festive Season Wrap-Up
This year’s property market showed resilience amid challenges, driven by a mix of demand shifts and economic adjustments. With auction activity now tapering off, the market looks forward to recharging during the festive break, resuming in late January with renewed momentum.
We wish you a happy holiday season and look forward to bringing you more updates in the new year!
Transcript
Hey everyone, Leanne Pilkington with you. The real estate wrap the week ending the 15th of December. This week, this weekend we had 816 properties gone for auction preliminary clearance rate of 63%. Last week, 927 properties had a final clearance rate of 54.8%. You might remember last week was the lowest preliminary clearance rate I had seen all year. Same weekend last year, 935 properties at 55.6% clearance rate. On the Central Coast
we had 44 at 53%, the Blue Mountains, 37 at 62.1%, Newcastle at 35 properties and 75% clearance, and Illawarra 32 at 67%. Our highest clearance rate across Sydney, 77.3% at for Baulkhams Hills and Hawkesbury, the Inner west and the Northern Beaches were both better than 70% as well Our lowest at 65.1%, was North Sydney and Hornsby.
Hope you are all having a wonderful week and enjoy an incredible Christmas break, and I will see you in the New year. Take care.
