The Domain Forecast Report for the 2023-24 financial year has revealed Australia’s housing market is set for record high amidst a steady recovery following the 2022 downturn.
The centre of expected positive price gains will be the combined capitals - led by Sydney, Adelaide, and Hobart - with a slower pace of growth across combined regional house and unit prices.
Domain Chief of Research and Economics Nicola Powell said a turbulent financial year marked with elections, interest rate rises, and an initial sign of recovery has Aussies wondering what’s to come for the housing market.
“Population pressures will lead the charge in factors driving housing demand and property prices higher over the next 12 months,” Dr Powell said.
“When you combine this with unprecedented headwinds in the construction industry and unseasonably weak listings, this has contributed to a forecast of continued tight housing supply that drives up market competition.
“While prices are expected to rise, affordability will contain the pace of growth, as the likes of rapidly rising interest rates and ongoing mortgage serviceability challenges.”
| Location | Houses | Units |
| Sydney | 6-9% | 2-5% |
| Melbourne | 0.2% | -2-1% |
| Brisbane | 1-4% | 0-1% |
| Perth | 1-3% | 1-3% |
| Adelaide | 2-5% | 0-2% |
| Hobart | 3-5% | 1-3% |
| Canberra | 2-4% | -1-2% |
| Combined capitals | 2-4% | 1-3% |
| Combined regionals | 1-3% | 0-2% |
Property prices have already defied expectations this year, rising 1.2% in May, the strongest monthly increase since November 2021 according to CoreLogic data.
This follows more modest growth of 0.6% and 0.5% in March and April respectively.
Here’s a deep dive into each capital city's growth forecasts according to Domain analysis.
Sydney: 6-9%
Sydney house prices are forecast to grow by 6-9% within the next financial year.
If this eventuates, the median house price will fall between $1.62 million and $1.66 million, surpassing the previous $1.59 million peak in March 2022.
According to Domain, Sydney unit prices will have a slow but steady recovery, if the forecast of 2-5% eventuates.
This growth range will mean the capital’s unit price will be roughly $5,000 to $28,000 lower than the median price achieved in December 2021 of $802,503.
Melbourne: 2%
Melbourne house prices are anticipated to grow by up to 2% over the next financial year.
The 2022 downturn sliced 6.5% from Melbourne house prices across five consecutive quarters. With a 2% increase, only one-third of the value lost during the downturn will be recouped.
Domain analysis also revealed Melbourne unit prices will remain more volatile across the next financial year if the -2% decline to positive growth of 1% eventuates.
Brisbane: 1-4%
Brisbane house prices are forecast to reach a new record high by the end of the 2024 financial year if the 1-4% growth eventuates.
The median house price will be $3,000 to $27,000 lower than the record high of $858,511 achieved in mid-2022.
“Last year's downturn saw house prices fall 6.1% from peak to trough over three consecutive quarters,” the report read.
“The recovery will be steady in comparison, taking at least six quarters of growth to recoup.”
Perth: 1-3%
If the forecasted growth of 1-3% eventuates, the median house price in Perth will surpass $700,000 for the first time to reach between $704,000 and $718,000.
“Perth has seen more stability than any other capital city markets as affordability and positive migration patterns support demand,” the report said.
“Based on our forecasts for FY24, Perth could avoid any material downturn in house prices, instead moving into a period of subdued growth compared to previous years.”
Adelaide: 2-5%
Adelaide house prices are expected to grow between 2-5% over the next financial year, bringing the median house price to $837,000-$861,000.
According to Domain, unit prices in Adelaide are likely to avoid any significant loss in price, confirming the dip recorded earlier this year was a “short-lived wobble.”
Hobart: 3-5%
Domain forecasts Hobart house prices to grow between 3-5% over the next financial year. This growth means the median house price will fall between $729,000 and $743,000.
“The 2022-23 downturn in Hobart was the second deepest of any capital city, spanning four consecutive quarters and slicing 9.9% from house prices,” the report read.
“The recovery is forecasted to be slow and steady, taking more than five quarters to recoup the value lost.”
Unit prices could record a new high if the uppermost forecast of 3% eventuates.
Canberra: 2-4%
Canberra house prices are expected to move into recovery over the next financial year with a forecast growth of 2-4%.
“This growth range means the median will fall between $1.058 million and $1.079 million, which is still lower than the $1.17 million peak in June 2022,” the report read.
“Canberra will retain its million dollar title, with the median not predicted to slip below seven digits.”
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