KPMG’s latest report sheds light on what buyers and investors can expect from the Australian property market in the coming months. Nationally, house prices are projected to rise by 5.3% over the next six months and an additional 5.6% throughout 2025. Apartment prices are also set to increase, with a 4.5% climb by December 2024 and a 5.6% rise over the following year, bringing them closer to house price growth rates. However, regional variations will play a significant role in the immediate future.
For instance, house prices in Perth are expected to surge by over 10% over the next six months, while Darwin and Hobart are likely to see only a 1.4% rise. Unit price growth will also vary significantly, ranging from an 8.6% rise in Perth to a modest 1.3% in Canberra. By 2025, this regional disparity is anticipated to lessen for houses, with Melbourne leading the national forecast at a 6.5% increase, followed by Canberra at 6.0%. Even Brisbane, which is expected to see the lowest growth, is still projected to rise by 5.1%. In contrast, apartments will continue to show varied growth across cities next year, from Perth’s strong 8.0% increase to Brisbane’s 2.5%.
Reflecting on the past year, national house prices rose by 7.7%, driven by high demand in cities like Perth, Adelaide, and Brisbane, with apartments not far behind at a 6.1% increase. The slightly slower growth rate expected for the remainder of 2024 is likely due to reduced migration and the cooling effect of sustained high interest rates. KPMG predicts that prices will pick up speed in 2025 as interest rate cuts by the RBA are introduced.
Rental costs are also on an upward trajectory, predicted to increase by 4-5% over the next two years after a notable 7.8% rise in the past year, marking the most significant rental increase since the 2008 financial crisis.
Dr. Brendan Rynne, KPMG’s Chief Economist, notes that despite high interest rates, inflation, and subdued consumer confidence, the property market has remained resilient, primarily due to strong demand and limited supply. Though migration rates have slowed and fixed-rate mortgage transitions have had a minor impact, Australia’s low unemployment and strong labor market have helped households manage these financial shifts. Despite a potential uptick in housing approvals, the report highlights that construction delays, rising labor costs, and persistent barriers to new developments mean that supply will remain tight, pushing some renters toward buying instead.
While 2024 may bring more moderate price gains, KPMG expects a solid market rebound in 2025, supported by anticipated interest rate cuts. This forecast suggests that buyers and investors should be prepared for gradual but steady price growth, particularly as supply pressures and demand dynamics continue to shape the market.
Why 2024 is the Perfect Year to Buy a Home in Canberra
If you’re considering buying a home in Canberra, there’s no better time than now. With Canberra’s housing market forecasted to experience steady growth in the coming year, entering the market sooner rather than later could help you make the most of future price increases and save on costs. Here’s a closer look at why buying now can be beneficial, from understanding the hottest neighborhoods to navigating Canberra’s unique market factors.
1. Local Market Insight: Canberra’s Key Neighborhoods
Choosing the right neighborhood in Canberra can make a big difference in your investment. Here’s a quick look at some popular areas for homebuyers:
Inner North (Braddon, Dickson, Ainslie): These neighborhoods offer a vibrant lifestyle close to the city center, with fantastic cafes, shops, and restaurants. Known for their mix of heritage homes and modern apartments, they’re popular with both professionals and families.
Inner South (Griffith, Narrabundah, Kingston): Canberra’s Inner South boasts high-end homes, waterfront views, and proximity to great schools. It’s ideal for those seeking a blend of city convenience with a more upscale, suburban vibe.
Gungahlin and Belconnen: Known for affordability and family-friendly amenities, these outer suburbs have seen significant infrastructure improvements recently. Both areas offer accessible pricing and a balance of suburban comfort with easy access to Canberra’s city center.
Each of these neighborhoods has its own strengths, and with property prices expected to rise, choosing the right area can be essential to getting the best value for your investment.
2. Take Advantage of Government Incentives
The ACT government offers several programs that can provide financial relief and incentives for first-time buyers:
First Home Owner Grant (FHOG): This grant helps eligible first-time homebuyers by reducing the financial strain of a home purchase. Eligibility requirements apply, but it’s worth looking into as a potential source of extra funds.
Stamp Duty Concessions: First-home buyers in the ACT may qualify for stamp duty concessions, which significantly reduce upfront costs. This can make a big difference, especially for buyers who are stretching their budget to buy in a competitive market.
HomeBuilder Program: Although limited in availability, the HomeBuilder Program (or similar local grants) may provide additional support, especially if you’re looking at new builds or off-the-plan purchases.
These incentives can help reduce the initial cost of buying, allowing you to focus more on finding the right home.
3. Real Client Success Story
Sometimes the best way to see the value of acting now is through real examples. Recently, I worked with a young couple in Canberra’s Inner North who were initially on the fence about buying. After considering the potential for price increases, they decided to move forward with their purchase in 2024. Just a few months later, their property has appreciated, giving them added equity and a sense of financial stability. Stories like this show how acting now can turn uncertainty into a long-term financial benefit.
4. Market Predictions for 2025
The forecast for Canberra’s real estate market in 2025 is promising. According to KPMG, Canberra house prices are expected to increase by around 6.0% next year. This expected growth suggests that buyers who invest now could benefit from rising home values, with their property potentially worth significantly more by the end of 2025. Apartment prices are also expected to follow this trend, so buying a home now could mean immediate growth in property value and equity.
If you’re someone who likes data, consider this: creating a simple graph or visual comparison showing projected growth could help you see the potential appreciation over time.
5. Tips for Navigating Canberra’s Competitive Market
If you’re ready to buy in Canberra’s current market, here are some tips for navigating the process successfully:
Get Pre-Approved for Financing: Securing a pre-approval gives you a budget to work with and makes your offer more attractive to sellers. In a competitive market, being able to act quickly with a pre-approved loan can make a difference.
Work with a Buyer’s Agent: Buyer’s agents have insights into Canberra’s property trends and can guide you to make strong offers without overpaying. They can also help you find homes that may not yet be on the market, giving you an advantage.
Prioritize Your Must-Haves: Know which features are essential for you versus what’s nice to have. This will allow you to act quickly and make confident decisions.
Be Prepared to Negotiate: With limited supply and high demand, flexibility on price, terms, or minor repairs can make your offer stand out.
6. Frequently Asked Questions (FAQs)
“When is the best time to buy in Canberra?”
Spring is often busier, bringing more listings but also more competition. Meanwhile, autumn and winter may have fewer listings, but there’s often less competition and more room for negotiation, making these seasons ideal if you’re looking for a more relaxed buying process.
“Should I wait for interest rates to drop before buying?”
While interest rate cuts can lead to better loan terms, waiting could mean facing higher property prices. Buying now allows you to secure a home at today’s prices and potentially refinance later if rates drop, giving you the best of both worlds.
“Is it realistic to find affordable properties in Canberra?”
Yes, Canberra has a range of options, especially in outer suburbs like Gungahlin and Belconnen, which are popular among first-time buyers. Exploring different areas and working with a buyer’s agent can help you find properties that fit your budget.
Final Thoughts: Take the Next Step
The Canberra market is growing, and buying in 2024 can help you secure a property before prices rise further. If you’re ready to take the next step or just want more information on Canberra’s neighborhoods and market trends, reach out for a consultation. As your local buyer’s agent, I’m here to help you make confident, informed decisions and guide you through every step of the process.
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