Perth and Brisbane set to lead growth in 2024

Property prices are expected to continue growing, with the smaller capital cities of Perth and Brisbane expected to be the top performers over the next 12 months, according to a new report.

Oxford Economics predicts that property prices in Perth will increase 9.1 per cent this year, making it the nation’s strongest property market. Over the next three years, they also predict Perth house prices to increase by 29 per cent and units by 34.4 per cent.

Senior Economist at Oxford Economics Australia, Maree Kilroy, expects Perth to continue its recovery after years of price declines. “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 the greatest supply chain and capacity constraints of all states,” Ms Kilroy said. “It has the strongest population growth, which we expect it to maintain over the next three years.”

Oxford Economics also predicts that Brisbane will see values rise 4 per cent, followed by Sydney at 2.6 per cent, Adelaide at 1.4 per cent and Melbourne at 0.9 per cent. Overall, the capital cities are predicted to increase in value by 2.7 per cent in 2024.

Ms Kilroy said the return of interest rate cuts from late 2024 should facilitate even stronger price growth over the next two years in Brisbane. “Demand fundamentals are expected to remain strong, with Queensland positioned at the front of the pack in terms of population growth,” she said.

“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, she said.

She said Sydney house prices will increase by about 16 per cent over the next three years, while units are expected to climb by more than 23 per cent over the same period as buyers seek cheaper housing options.

“With the context of a growing dwelling stock deficiency, the return of interest rate cuts will drive the next acceleration of price growth from late-2024 onwards,” she said. “However, the pace of growth is slowing as a result of the additional interest rate lift in November and rising total listing volumes, so this year would be softer in terms of price growth.”

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