Housing market underperforms in 2024, but long-term growth strong

Residential real estate remains a cornerstone of Australia’s wealth, with an estimated total value of $11.1 trillion, significantly surpassing the combined value of Australian superannuation funds ($4.1 trillion) and the Australian stock exchange ($3.3 trillion).

However, the housing market has underperformed throughout 2024, according to CoreLogic’s Housing Chart Pack for January.

CoreLogic economist Kaytlin Ezzy said that when factoring in both capital gains and dividend income, the Australian equity market outpaced property in 2024. The equity market saw an 11.4 per cent increase, compared to property’s 8.3 per cent growth.

“Despite uncertainty in the global and domestic economic outlook and the cost-of-living crisis, the ASX reached a series of new record highs in 2024, buoyed by moderating inflation, coasting economic conditions and a strong outing from the banking sector,” Ezzy said.

In contrast, the housing sector’s total return, which accounts for both value growth and rental income, lagged behind.

“Despite showing some resilience in the first half of the year, the accumulation of stock, and the higher for longer interest rate environment has seen the change in dwelling values slow, and, in some cities, shift into negative territory,” Ezzy said.

She also said that the normalisation of net overseas migration and an increase in average household size had contributed to a decline in rental growth over the year.

“These factors saw housing offer a total return of 8.3 per cent over the 2024 calendar year, down from the 13.5 per cent total return seen last year and approximately 3 percentage points below Australia’s equity market,” she said.

Investing is a long-term game

Despite the dip in 2024, housing has outperformed equities in six of the past 10 years. Over the past decade, residential property has delivered cumulative total returns of 132.6 per cent, compared to 126.4 per cent for equities.

“Whether it’s housing or equities, it’s normal to see some market volatility and both booms and busts are part of the usual asset pricing cycle. Regardless of asset type, time on the market has beat timing the market,” Ezzy said.

Median days on market have increased

CoreLogic’s Housing Chart Pack also revealed that the median time on market trended higher during the December quarter, reaching 33 days, up from around 28 days through much of 2024.

“Given current conditions are skewing in favour of buyers, it’s unsurprising to see it take a little longer to secure a sale as buyers take their time assessing their options,” Ezzy said.

Adelaide was the only capital city to record a dip in the median days on market, dropping from 29 days in the December quarter of 2023 to 28 days in Q4 2024.

Darwin and Canberra saw median selling times hold steady at 57 days and 44 days, respectively. All other cities experienced an increase in median selling time compared to a year ago.

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.