Home prices ease into 2025, but big gains in affordable areas

Scott Kuru January 6, 2025 4 min read

KEY POINTS

REA Group’s PropTrack says national home prices fell 0.17% in December 2024, the first easing in two years
However, the latest PropTrack Home Price Index report finds that national home prices finished 2024 4.73% higher
PropTrack’s data also clearly shows the above-average price gains made in affordable areas of Australia’s major cities

PropTrack says the median price of a home in Australia eased by 0.17% during the month of December 2024 to $795,000.

However, that’s still 4.73% or $33,000 higher compared to the median national price on the 31st of December 2023 and 45.1% or $231,170 higher than the median price at the onset of COVID-19 in March 2020.

PropTrack’s Home Price Index report also clearly demonstrates that affordable suburbs in Australia’s major cities have seen home prices grow much faster than citywide medians.

The details

PropTrack’s latest Home Price Index report says capital city areas led a national decline in December 2024, falling by 0.25% during the month, while regional areas rose by 0.03%.

Canberra (-0.61%) and Melbourne (-0.53%) recorded the sharpest drops, with prices also down in Sydney (-0.29%), Brisbane (-0.04%), Adelaide (-0.18%) and Darwin (-0.25%).

Booming Perth (+0.39%) and Hobart (+0.03%) were the only exceptions.

“Contributing to the slowdown – and reversal – of price growth, the number of properties for sale has been relatively high over the second half of 2024, particularly compared to the same period in 2023,” says PropTrack Senior Economist Anne Flaherty.

“This has given buyers more choice, and we’re seeing them take more time when purchasing.

“While the impact of Stage 3 tax cuts, which took effect in July, bolstered borrowing capacities for some buyers, this has been counteracted by softer economic conditions.

“In particular, interest rate cuts that were originally anticipated prior to 2025 have now been pushed back.”

Sydney, Melbourne and booming Perth

During 2024, Sydney home prices grew 3.43% to close the year with a median home price of $1,106,000, while Melbourne eased 2.49% to finish at $780,000.

According to PropTrack's figures, Melbourne is now the fifth most expensive (or fourth cheapest) Australian capital city to buy a home.

The median price of a home in Melbourne has historically tracked at about 78% of Sydney’s median.

That’s now blown out to 70%, underlining the southern city’s relative affordability to its northern rival.

“Victoria has been relatively more successful at building more homes compared to the other states,” Anne Flaherty says.

“It also continues to see a strong investor exodus due to significant tax deterrents, decreasing demand and driving up supply.”

Despite the rate of price growth slowing towards the end of 2024, booming Perth ended 2024 a whopping 17.59% higher, with a median home price of $773,000.

“Both houses and units have performed strongly, with houses up 17.5% and units up 18.8% year-on-year,” PropTrack’s Anne Flaherty says.

“Driving Perth’s outperformance has been strong population growth, which has outpaced new housing supply, as well as high levels of investor demand.”

Houses versus units

PropTrack’s figures show little difference between houses and units with both seeing their respective national median prices fall by 0.17% in December, to reach $868,000 and $653,000, respectively.

Houses and units also moved at a similar speed over 2024, ending the year up 4.8% and 4.6%, respectively.

Affordability

With official interest rates being kept at a 14-year high of 4.35% by the Reserve Bank of Australia, there was a marked flight to affordability during 2024.

Nowhere is this more apparent than in the price growth “heatmaps” of the capital cities published by PropTrack as part of its Home Price Index report series.

While Adelaide experienced stellar price median home growth of 13.53% in 2024, you can clearly see suburb growth was stronger than the citywide median in the city’s more affordable suburbs, most of which are located in the north of the SA capital.

It’s a similar story in cities where there has been weaker home price growth.

While Sydney only managed 3.43% citywide growth in 2024, PropTrack’s heatmap shows suburbs in the city’s affordable west and southwest grew at rates of more than 6%.