2024, the year affordable property dominated

Each year, CoreLogic wraps up the year in property with its “Best of the Best” report, spotlighting top-performing markets and looking ahead to the following year.

This year’s report contains the usual facts and figures about the most expensive sales.

(The most expensive house sale this year was an eye-watering $51,500,000 paid for 142 Wolseley Road, Point Piper, in Sydney’s Eastern suburbs)

But of far more interest to most Australians is what the report shows about the strong national performance of residential property, particularly in a high-interest climate coupled with a cost of living crisis.

The Best of the Best report says the total number of home sales reached 528,000 nationally in the 12 months to November 2024.

That’s an 8% increase on 2023’s sales and a 6% rise from the previous five-year average.

Over the same period, national home values increased 5.5%, with the combined value of Australian homes now surpassing $11 trillion.

Key to this strong growth is the performance of “affordable” homes and the strong value growth in many unit markets.

Affordable homes

Through the year to November 2024, CoreLogic’s Best of the Best report says home buyers responded to “elevated interest rates and affordability challenges” by flocking “to more affordable segments of the market.” 

The report shows the bottom quartile of values in Australia’s national residential property market (what’s usually classed as “affordable” homes) rose 10.3%, far outperforming the middle of the market (up 7.2%) and upper quartile of home values (3%).

“This trend toward faster growth in more affordable markets was reflected in the Best of the Best results for capital cities in 2024,” the report says.

“The top growth house markets were all located in Perth, and half of the suburbs had a median house value below $661,000, which is the 25th percentile house value nationally.”

Bellevue in Perth’s eastern suburbs saw the sharpest capital city house growth in the country, with values skyrocketing 36.9% or $181,977.

The Darwin suburb of Millner was the worst performer, with houses there slumping 11% or $63,664.

Units

The drive to affordability also saw units outperform houses in terms of value growth.

The top ten capital city unit markets were in Perth, Brisbane and Adelaide, and all were valued below $600,000.

Armadale in Perth’s sprawling south-east was the best capital city unit performer, notching up an astounding 45.5% or $151,637 in value growth in just 12 months.

Suburban Melbourne markets dominated the list of worst unit market performers, with Sunshine in the western suburbs shedding nearly 14% or more than $75,000 in value.

Growth areas

Affordable “growth” areas of cities and regions also performed surprisingly well when it came to the metrics of the total value of property sold per suburb.

This saw affordable Point Cook in Melbourne’s western suburbs (median price $817,048) take out 3rd spot with more than $1 Billion in sales, just behind expensive Castle Hill in Sydney’s north-west (median price $2,339,382).

The exclusive north-shore suburb of Mosman (median price $5,580,736) was the clear winner in that category, with $1.65 Billion dollars worth of property changing hands.

Melbourne CBD - popular with international students - with a median price of only $466,115 - was the top-performing unit market in terms of sales, turning over $782,311,226.

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Relatively affordable (for Sydney) Sydney CBD and Dee Why also made the Top 5 sales turnover list for capital city unit markets, with $629 million and $596 million in sales, respectively.

The outlook 

“Best of the Best” report author Eliza Owen says she believes the early months of 2025 “may see a continuation of the drag on buyer demand exhibited towards the end of this year and could result in a small decline in national home values in the first part of the year.”

However, with consensus building that the Reserve Bank of Australia will have started cutting rates by the middle of the year, she says, “A change in the official cash rate target could then mark an inflection point, increasing demand in the second half of the year.”

Nevertheless, affordability looks set to continue to be a major factor.

“CoreLogic estimates that an affordable dwelling purchase for the median income household in Australia under the current average owner occupier (interest) rate (6.27%) would be around $507,000 – a far cry from the current median (national property price) of $813,000,” Ms Owen says.

“Even in the event of average mortgage rates reducing by 125 basis points (assuming the cash rate reduces to 3.1%, and reductions are passed on to mortgage rates in full), this only takes an affordable purchase price to $581,000.”

“For this reason,” she says, “2025 might be another year marked by low-deposit buyers, such as first home buyers, dropping out of the market.

“Meanwhile, relatively affordable market segments, like the unit sector, may outperform over the course of the year.”

In other words, 2025 could be another year where affordable property and units dominate.