Has the property market peaked?

In recent months, we’ve seen a definite shift in the property market. It’s left one question on many aspiring property owners’ lips: Has the property market peaked?

If you’re looking to make the most of falling interest rates and buy a home or an investment property in 2025, it’s important to be up to speed with what’s happening before you dive in.

Let’s run through what we know so far.

Property price growth is losing steam

Australia’s home values were up 4.9 percent in 2024, adding approximately $38,000 to the median value of a home.

The first half of 2024 saw national home values rise 4.1 per cent, before slowing to just 0.7 per cent through the second half of the year. Five of the eight capitals recorded a decline in values between July and December.

Following a strong period of growth between February 2023 and October 2024, prices peaked in October and remained flat in November, then dropped -0.1 percent nationally in December. That represented the first decline in almost two years. Prices remained broadly steady across January.

CoreLogic research director Tim Lawless said the decline in values was not surprising.

“This result represents the housing market catching up with the reality of market dynamics,” he said.

“Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher.”

Rental growth has slowed

In 2024, the rate of national rental growth decelerated.

Throughout the year rents rose 4.8 percent. In contrast, rents increased 8.1 per cent in 2023.

In the December quarter, we saw national rent values increase just 0.4 per cent. That represented the smallest fourth quarter change in rents since 2018.

According to CoreLogic, the numbers paint a clear picture – the national rental market has passed the peak of the rental boom.

“Rental affordability continues to be a significant drag on rental growth,” CoreLogic economist Kaytlin Ezzy said.

What this means for sellers and buyers?

CoreLogic Head of Research Eliza Owen said a cyclical downswing was likely for early 2025, but it may not necessarily be large. She said home value declines tended to be shorter and smaller than periods of property price growth.

Given the market conditions, some sellers may avoid selling until property prices come up, thereby restricting the supply of properties on the market. Growth in real incomes may also support buyer demand as inflation continues to come down.

The RBA has cut the cash rate, and this could push up property prices, as buyers’ borrowing capacities increase.

Bottom line: the property market may have peaked, but the downturn in housing values is likely to be moderate and short lived, according to the experts.

Looking to buy?

If you’re hoping to buy a home or investment property, get in touch and we’ll run through your finance options. Interest rates have been on the move lately, which is a compelling reason to have a professional like us on your side. We understand the intricacies of a changing lending market and will find the right home loan for your specific needs.

Please contact us for assistance.