Prices to jump 2–5% over FY25: PropTrack

The latest PropTrack Property Market Outlook Report June 2024 has national property prices projected to rise a further 2–5 per cent in the 2024–25 financial year.

According to the report, property prices have already risen by 5.9 per cent over the financial year to date and up by 2.7 per cent between January and May 2024 alone.

Perth, which has so far led the home price growth, is expected to continue to hold this position in the coming financial year; however, PropTrack has projected this to be at a slower pace.

Over the financial year to date, Perth prices have increased by 18.9 per cent and are predicted to increase a further 8–11 per cent in FY25.

Cameron Kusher, PropTrack director of economic research and author of the report, said: “Forecasting home price growth for the year ahead becomes increasingly challenging as we observe a property market that is proving to be far more resilient than anticipated.

“Buyer demand remains strong despite interest rates sitting at 12-year highs, borrowing capacities falling and the volume of stock for sale increasing, leading property prices to rise at a faster rate than expected.

“We expect home price growth will be slightly stronger by the end of the 2024–25 financial year than annual growth over the 2024 calendar year, with prices anticipated to rise in the larger markets of Sydney and Melbourne over the next 12 months while slowing in several capital cities.

“Over the next financial year, the introduction of Stage 3 tax cuts and projected interest rate cuts have the power to further entice buyer demand while supply from new dwelling commencements and completions are expected to remain low.”

Indeed, research released by Aussie Home Loans found that the incoming stage 3 tax cuts have the potential to increase borrowing capacity for buyers.

The research found that single Australians with no dependents earning $120,000 a year can currently borrow a maximum of $615,135; however, with the tax cuts coming into effect, this could increase by 4.4 per cent ($27,062) on a mortgage based on a 6.28 per cent interest rate in the next financial year.

Married couples with two dependents earning a combined gross income of $280,000 could see borrowing capacity increase by over $75,000 on the same home loan.

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