Sydney home price growth to slow in 2025: PropTrack
Dec 2024Karen Millers
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Growth in Sydney home prices is expected to shift gears next year as exhausted home seekers pull out of the market and more cash strapped homeowners attempt to offload their properties.
New modelling from PropTrack forecast Sydney home prices would inch up 1-4 per cent over 2025 – a marked slowdown from the nearly 10 per cent rise in prices recorded in some city regions this year.
The research group pointed to delays in interest rate cuts and affordability challenges as headwinds for the market that would likely drag buyer demand.
The supply of properties for sale, which was low for much of 2024, is also expected to continue rising, giving home seekers more choice and easing pressure to bid up prices.
Listings have already been rising for much of the second half of this year, partly due to more investors selling their homes as a result of rates remaining higher for longer.
The number of homes advertised for sale in November was 12.4 per cent annually and the highest level in “over a decade”, according to PropTrack.
PropTrack director of economic research and report author Cameron Kusher said price growth over 2024 was impressive given the recent influx of listings and affordability challenges.
But he added that market momentum was shifting.
“With price growth moderating, stock levels rising, and the expected timing for interest rate cuts delayed, we anticipate weaker price growth compared to recent years,” Mr Kusher said.
PropTrack’s modelling comes on the back of similar predictions from property analysis group SQM Research, which forecast a minor fall in prices in the months leading up to an interest-rate cut.
SQM Research then expected an uplift in prices to follow a Reserve Bank announcement of a cash rate cut in the middle of the year.
Nicola McDougall, chair of the Property Investment Professionals of Australia, said Sydney would see slower growth due to affordability constraints and an increase in available stock.
“After nearly two years of much higher interest rates, some homeowners and investors simply can’t continue to wait for rate cuts,” she said.
Ray White chief economist Nerida Conisbee said history suggested the Sydney market tended to respond strongly to interest rate cuts.
Any weakness in the market would likely diminish once the RBA dropped the cash rate, Ms Conisbee said.
Originally Published: Aidan Devine | realestate.com.au | 18 December 2024
https://www.realestate.com.au/news/sydney-home-price-growth-to-slow-in-2025-proptrack
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