Quarterly Market Wrap: Q3 2024 Australian Property Trends & Outlook

Another quarter down, and the Australian property market has once again proven its resilience and complexity. If you’ve been trying to keep up with the headlines, you’ll know it’s been a mix of surprising strength, stubborn challenges, and evolving property market trends.

Whether you’re a seasoned investor, a first-home buyer watching from the sidelines, or simply curious about the state of the market, understanding what’s driving these movements is key. This Q3 2024 wrap-up breaks down the key themes, the data behind them, and what they might mean for the road ahead.

Let’s dive into the numbers and narratives that defined the last three months.

The Big Picture: Resilience in the Face of Headwinds

The overarching story for Q3 2024 has been one of moderated growth. Nationally, property values continued their upward trajectory, but the breakneck speed of earlier in the year has eased. According to data from CoreLogic, the national median dwelling value rose over the quarter, though the rate of growth has softened compared to Q2.

This deceleration isn’t a sign of an impending crash. Instead, it signals a market that is responding logically to its primary constraints: high interest rates and affordability pressures. It’s a market maturing, not collapsing.

Key Property Market Trends of Q3 2024

1. The Two-Track Market Intensifies
One of the most consistent property market trends we’ve observed all year became even more pronounced in Q3: the stark divergence between housing segments.

• The Top End: The premium end of the market has shown remarkable strength. Properties in the top 25% of values by price have outperformed, largely insulated from the impact of rate rises. This segment is often driven by equity-rich upgraders and low levels of debt.
• The Affordable End: Meanwhile, the more affordable end of the market, typically driven by first-home buyers and investors, has felt the pinch of higher mortgage costs more acutely. Growth here has been more subdued, highlighting the acute sensitivity to borrowing capacity.

2. The “Land” Premium Continues
The value of scarce land is shining through. Across the capital cities, houses continued to outperform units in terms of capital growth. The preference for space—a backyard, room for a home office, and development potential—remains a powerful driver for families and investors alike. This trend underscores the long-term value of land-centric assets in a growing nation.

3. The Regional Recalibration
The great regional migration boom of the pandemic years has well and truly settled. In Q3, capital city markets broadly outperformed regional markets. The primary driver? A steady return to office mandates and the undeniable pull of economic opportunity and amenities in major cities. That’s not to say regional markets are falling; many are still seeing stable growth, but the pace has cooled significantly.

4. The Rental Crisis Grinds On
For tenants, Q3 offered little reprieve. Vacancy rates remained at historic lows, applying intense upward pressure on rents across the board. This is a fundamental supply and demand issue. Simply put, we are not building enough new homes to keep pace with record levels of immigration and household formation. This trend is a critical factor underpinning investment demand, as strong rental yields help offset higher mortgage costs for investors.

The Key Drivers: What’s Fueling the Market?

Understanding these property market trends requires looking at the engines under the hood:

• Supply Shortfall: The chronic undersupply of housing, both for purchase and for rent, remains the single most powerful factor supporting prices. Building approvals continue to lag behind long-term averages, meaning this problem won’t be solved overnight.
• Population Growth: Australia’s robust population growth, driven by strong net overseas migration, continues to create sustained demand for housing.
• Stubborn Inflation & Interest Rates: The RBA held the cash rate steady at 4.35% throughout Q3, but the “higher for longer” rhetoric has kept borrower sentiment cautious. Affordability is the biggest brake on the market right now.

The Q4 2024 Outlook: What’s Next?

As we look ahead to the final quarter of the year, a few key themes are likely to dominate:

1. The Spring Test: Spring is traditionally the busiest selling season. A significant surge in new listings will test the market’s depth. If buyer demand can absorb this increased supply, it will signal underlying health. If not, we could see a further slowdown in growth.
2. The Interest Rate Watch: All eyes will remain glued to the RBA and inflation data. While rates are expected to have peaked, the timing of any potential cuts remains uncertain. The market is poised to react swiftly to any shift in this narrative.
3. A Focus on Fundamentals: In an environment of moderated growth, property-specific factors will matter more than ever. Quality assets in well-located areas with strong rental profiles are expected to hold their value best. This is a market for smart, selective investing.

Navigating the Trends with a Data-Led Approach

In a complex and fragmented market, following the headlines is a risky strategy. Success hinges on a deep, analytical understanding of localised property market trends and fundamental drivers.

This is the core of what we do at Real Estate Science Fund. We move beyond the hype to analyse the data that truly matters—local supply pipelines, demographic shifts, and economic indicators—to build resilient portfolios designed for long-term performance.

Our research-driven approach is designed to identify opportunity and manage risk, regardless of where we are in the cycle.

Explore Our Research-Driven Investment Strategy to understand how we navigate market complexity.

The Final Analysis

The Q3 2024 property story is one of a market taking a breath. Growth has moderated, but fundamentals remain strong. The trends of a two-track market, a land premium, and a severe rental shortage continue to define the landscape.

For investors, this environment underscores the importance of strategy over speculation. It highlights the value of focusing on quality assets and a long-term horizon, trusting that well-researched investments will continue to be the cornerstone of wealth creation in Australia.

Disclaimer: This blog post is for informational purposes only and does not constitute financial or investment advice. Please seek independent professional advice before making any investment decisions.