Home prices in Australia ‘to crash’ in nightmare scenario
Australian home prices could plummet if a nightmare scenario unfolds for homeowners between now and the end of next year.
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Australian home prices could plummet by up to 10 per cent if a nightmare scenario unfolds for homeowners between now and the end of next year.
According to new data from SQM Research: continued interest rates rises, record immigration, growing unemployment and an oil price shock could send home prices crashing across much of the country in 2024.
According to SQM Research’s Housing Boom and Bust Report 2024, under a scenario where the RBA’s cash rate rises above five per cent, unemployment grows to more than six per cent, inflation returns to near seven per cent (on the back of a Middle East oil embargo) and immigration continues at around 460,000 per year, the Australia housing market will suffer some significant falls in many markets.
“The interests rate rises of 2022, 2023 and possibly 2024 will finally start to bite homeowners and would-be homebuyers alike. Distressed selling activity is expected to jump, especially in NSW where we are already starting to see a new trend upwards in that data set,” Louis Christopher, Managing Director of SQM Research said.
Under the above scenario, home prices in Melbourne could fall by as much as seven per cent through 2024, in Sydney they could fall by up to six per cent. Adelaide could suffer a three per cent price fall, while Darwin would be hit with minus four per cent growth. Canberra would be the worst hit, suffering home price falls of 10 per cent.
Brisbane’s property market is currently so strong that even with the congruence of these events, SQM research predicts prices would still grow in the Queensland capital between one and four per cent.
HOME PRICES SYDNEY 2024
Skyrocketing interest rates could finally take their toll on Sydney home prices next year, with a market correction predicted to send values spiralling downward.
And while that spells potential bad news for homeowners, there’s likely little for most homeseekers to celebrate.
According to new data from SQM Research, the RBA’s 13 cash rate rises since May last year will begin to bite hard into the market in early 2024.
In combination with several other factors including record population growth, continued inflation and rising unemployment, the Reserve Bank of Australia’s concerted rate rise push, could lead to a fall of up to 6 per cent in Sydney home prices next year.
READ MORE about Sydney home price predictions for 2024
HOME PRICES MELBOURNE 2024
Melbourne home prices could fall nearly $65,000 next year amid fears of a 14th interest rate hike shattering a housing recovery that has barely begun.
New insights from SQM Research in Christopher’s Housing Boom and Bust Report estimated home prices could fall as much as 7 per cent, or potentially rise 3 per cent in 2024, depending on inflation, the conflict in Middle East, population growth and a potential unemployment rise.
This means prices could drop by around $65,000, or may rise as much as $28,000 — based on PropTrack’s Melbourne median home price of $924,000.
If there is a rise in the population more than 500,000 people however, this could lead to a more modest price drop.
READ MORE about Melbourne home price predictions for 2024
BRISBANE HOME PRICES 2024
Brisbane is forecast to see double digit housing price growth next year if Australia’s migration levels continue to surge, with not even an energy crisis expected to force it into negative territory.
Housing prices here were expected to rise by 4 to 8 per cent in a base case scenario – just pipped by Perth’s 5 to 9pc – but Brisbane could blow out to as much as 7 to 11 per cent if national population growth does not slow below 460,000 people and inflation reignites.
Latest Australia Bureau of Statistics figures show the national population grew by 563,200 people in the year to March, with net overseas migration making up 81 per cent of growth, adding 454,400 people. Queensland accounted for 22 per cent or a rise of 124,200 people during the period, of which over 70,000 were overseas migrants and 31,000 from interstate.
Christopher, said “if we were to see the (Australian) population expand by 500,000 plus (in 2024) – and keep in mind this current calendar year looks like it’s expanded by about 575,000 – then Brisbane could be the number one outperforming city”.
READ MORE about Brisbane home price predictions for 2024
ADELAIDE HOME PRICES 2024
There appears to be no relief in sight for househunters looking to enter the market in South Australia, with a new report showing Adelaide is tipped for continued home value growth next year.
In SQM Research’s Housing Boom and Bust Report, provided exclusively to The Advertiser, Adelaide homes are on track to experience a value rise of between 0 per cent and 3 per cent – in line with the national capital average of -1 per cent to +3 per cent.
This is based on the report’s assumption of what it deems to be the most likely economic situation for 2024 – cash rate ranges between 4.1 per cent to 5 per cent, population growth slowing to 460,000 or less, and unemployment rising to between 4.5 per cent and 5.5 per cent.
READ MORE about Adelaide home price predictions for 2024
Originally published as Home prices in Australia ‘to crash’ in nightmare scenario
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