Three Aussie cities are poised to record double-digit price growth by the end of the year, with a Big 4 bank revealing its housing forecasts out to 2026.
ANZ has tipped that Aussie home prices will finish the year up 7.3 per cent overall, with price growth expected to cool slightly next year, to around 5.5 per cent.
But some of the nation’s top performing markets are expected to record double-digit price growth by years end, led by Perth (+25 per cent), Adelaide and Brisbane (around 15 per cent).
“Outcomes differ across the country,” the ANZ Australian Property Insight report says.
“Prices are currently up 18 per cent year-to-date in Perth and over 10 per cent in Adelaide and Brisbane.
“Meanwhile, Melbourne and Hobart look sluggish, and we expect to see further price declines.”
Brisbane home values are forecast to continue to grow between now and 2026.
And it is the cheaper housing stock that is recording the biggest increase in prices, with prices in Brisbane’s bottom quartile now 30 per cent higher than the 2022 peak.
“More affordable properties (in the bottom quartile) have outperformed,” the report said.
“There’s been a shift towards outer suburban areas, where additional supply is greater and prices are lower.
“On the flip side, the top quartile of the Sydney market remains below the post-Covid peak, and Melbourne’s most expensive homes recorded sharp price falls.”
ANZ-CoreLogic Affordability report
The major bank has forecast price growth across all capital cities out to 2026, tipping price growth of 7.3 per cent (2024), 5.5 per cent (2025 and 2026).
Brisbane home values are expected to finish the year up 15.2 per cent, with growth forecast in 2025 (+6.4%) and 2026 (+4.9%).
It is a similar story in Adelaide, with forecast growth of 15.4 per cent (2024), 5.7 per cent (2025) and 5 per cent (2026).
Sydney home values are also on an upward trajectory: 4.2 per cent (2024), 6 per cent (2025) and 6.6 per cent (2026).
Perth continues to perform strongly in the years ahead, albeit with price growth slowing.
Melbourne’s property market is forecast to improve. (Photo by: Brett Price/VW Pics/Universal Images Group via Getty Images)
ANZ is forecasting growth of 25.1 per cent by years end, followed by 7.4 per cent next year and 4.9 per cent in 2026.
Canberra home values area also tipped to rise further, up 2 per cent this year, followed by 3.3 per cent in 2025 and 4 per cent in 2026.
Homeowners in Melbourne and Hobart can expect a change in their fortunes after a drop in values this year of 1.7 and 0.7 per cent respectively.
Melbourne home values are then forecast to grow in 2025 (+3.9%) and 2026 (5.4%), while in Hobart values are expected to climb 2.4 per cent next year and 3.4 per cent in 2026.
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ANZ-CoreLogic Affordability report
But homeowners appear to be holding on, despite cost of living pressures.
“Across ANZ’s home loans, 90-plus day arrears remain below March 2020 levels for most of the country, apart from in Victoria and Tasmania,” the report said.
“Arrears are lowest in Queensland, followed by South Australia and the Northern Territory.”
Meanwhile, the price gap between houses and units nationally has reached a record high of $321,000.
However, monthly growth in units outpaced growth in houses for the first time (in September) since January 2023 with ANZ tipping that affordability constraints may start to narrow that gap.
Sales are also outpacing new listings in Perth, Adelaide and Brisbane.
“In Western Australia, Queensland, South Australia and the Northern Territory, the population has grown faster than the dwelling stock over the last few years,” the report said.
“In Victoria and to a lesser extent NSW, dwelling stock has grown more than the population. “Between March 2020 and March 2024, Victoria’s dwelling stock rose 7.8 per cent, while population grew 5.2 per cent.”
The report said that record high population growth had contributed to housing demand growth, especially in places like Queensland.
But that population growth has “passed its peak” and should continue to ease, but the pace of easing is likely to be slow.
The report found that demand was exceeding supply in most housing markets, while the construction pipeline “looks soft”.
“Construction insolvencies are still growing, as firms struggle with margin pressures, capacity constraints and cost increases,” the report said.
“Many construction firms, particularly those specialising in high-density apartments, are competing for resources with large infrastructure projects.”
ASIC’s annual insolvency data shows more than 11,000 companies entered external administration for the first time in 2023-24.
Over 2400 construction companies have entered external administration this financial year.
The ANZ report revealed that there were just 49 building approvals for every 100,000 people in Australia during the second quarter of this year.
Unit approvals, in particular, were driving the weakness in building approvals, it said.
Australian Bureau of Statistics revealed that the number of dwelling approvals fell 6.1 per cent in August to 13,991, after an 11 per cent rise in July – which was met with disappointment by Property Council group executive policy and advocacy Matthew Kandelaars.
“We need to increase the number of homes approved and ensure a strong pipeline of apartment supply, to drive towards our housing targets at scale,” he said.
“But the reality is that it has never been more difficult and costly to get apartments out of the ground.”
The report comes after PropTrack Housing Affordability Report revealed that housing affordability is now at the worst level on record.
PropTrack economist Paul Ryan said the decline in housing affordability is a result of continued high mortgage rates at levels last seen in 2011, combined with home price growth equivalent to a $50,000 increase in the national median home price over the past 12 months.
“There has been a rapid decline in affordability in just a few years,” he said.
“A median income household – earning just over $112,000 a year – can afford to purchase just 14 per cent of homes sold across the country. That’s a sharp fall from just three years ago, when this figure was 43 per cent of homes.
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