After a sharp rebound last year when the median house price jumped 10.3 per cent, Sydney house prices are forecast to rise by 3.3 per cent and units by 5.2 per cent during the 2024 financial year.
Over the next two years from 2025 and 2026, house prices are expected to increase by 5.9 per cent annually, while units are set to lift by 8.3 per cent each year, the consultancy said.
Perth is set to outperform, with prices forecast to jump by 10.4 per cent over FY 2024, increasing by another 9.8 per cent in 2025 and 6.4 per cent in 2026. Over the next three years, house prices are set to increase by 29 per cent and units by 34.4 per cent.
“Perth has underperformed for years, even as the other capitals were rebounding sharply, so it has so much to catch up on to maintain that relativity with those other capital cities,” Ms Kilroy said.
“Perth has a significant stock deficiency and WA has greatest supply chain and capacity constraints of all states. It has the strongest population growth, which we expect it to maintain over the next three years.”
Home values in Melbourne would also rebound in the next couple of years, boosted by the resurgence in overseas migration and normalising net interstate migration, the consultancy said.
However, prices were likely to hold flat this financial year as listings surged faster than demand, Ms Kilroy said.
“Rising total listings have provided greater options for buyers in Melbourne, reducing urgency to purchase, in turn leading to easing conditions,” she said.
Over the two years to June 2026, both the median house and unit price are forecast to increase 5.5 per cent and 6.5 per cent annually respectively. Over three years, house prices are set to increase by 11.3 per cent and units by 13.4 per cent.
Brisbane’s house prices are forecast to lift by 5.9 per cent in FY2024, and units by 8.2 per cent, helped by low listings and lower priced points compared to Sydney and Melbourne.
“The return of interest rate cuts from late-2024 should facilitate even stronger price growth over the two years to FY2026,” Ms Kilroy said.
“Demand fundamentals are expected to remain strong, with Queensland positioned at the front of the pack in terms of population growth.
“Adding to this, the 2032 Olympics should provide a sustained boost to developer and buyer optimism from mid-decade.”
Over the next three years, Brisbane house prices are expected to climb by 19.8 per cent and units by 23.3 per cent.
Adelaide’s strong run last year has further to go, albeit at a slower pace as affordability starts to bite, Ms Kilroy said.
House prices are set to increase by 7.7 per cent this financial year, but will slow to 2.5 per cent by June 2025 before adding another 5.6 per cent by 2026. Over the next three years, house prices are expected to climb by 16.6 per cent while units are set to rise by 19.3 per cent.
“We’re a bit wary of the longevity of the Adelaide performance because net interstate migration has come back to a more balanced market so the impulse to demand from that internal migration has weakened,” she said.
“During the pandemic there was an excess of returning young households or not leaving Adelaide so that helped a little price growth a bit.
“We’re also going to see the pipeline of home builder and house completions reaching the market this year so that additional stock could dampen prices to some extent.”