Australia’s national median house price reportedly hit a record high of $774,000 in April. This price has increased by 6.6% since 2023. Rising interest rates have reduced Australians’ purchasing power by nearly 35% to 40%. No interest rate cuts are expected in 2024 due to stubborn inflation, although two rate cuts were expected at the beginning of the year.
Australian homebuyers remain concerned about high interest rates, but fears of missing out are prevalent among buyers who have been priced out of market for too long. Greater certainty about interest rates will determine how buyers waiting for a potential rate cut return to the market. On May 8, realestate.com.au reported that Australian house price growth could slow as the Reserve Bank kept key interest rates at a 12-year high of 4.35%. . Optimism that a rate cut is imminent has waned after March’s higher-than-expected inflation rate. Price growth is expected to slow in the winter months, as inflation could lead to further interest rate increases.
While the number of homes for sale typically falls after Easter, 2024 is different, with an increase in scheduled auctions compared to 2023. In the week from May 6 to 12, 2,548 homes are scheduled to be auctioned across the country, a 43% increase compared to last year. 1,158 homes are up for auction in Victoria, a 55 per cent increase on last year. In New South Wales, 906 bids are expected, 38 per cent more than a year ago.
Despite high supply in Victoria and New South Wales, South Australia and Western Australia do not observe the same number of homes, leading to higher prices. At the same time, house prices in Perth have increased by 20% year-on-year and in Adelaide by 14%, but housing stock remains low. Therefore, while the Australian property market currently faces challenges regarding housing affordability and scarcity, the interest rate scenario is not entirely uncertain. Also keep an eye on the world’s fastest growing real estate market.
4. Mirvac Group (ASX:MGR)
Market capitalization: $5.4 billion
Mirvac Group (ASX:MGR) is an Australian diversified property group with a property investment portfolio and development business. The company is Australia’s leading developer of urban space, including residential developments, landmark offices and mixed-use precincts. As of May 10, Mirvac Group (ASX:MGR) was valued at $5.4 billion, making it one of Australia’s top 20 property and real estate companies.
3. Stockland (ASX:SGP)
Market capitalization: $7.2 billion
Stockland (ASX:SGP) is one of Australia’s largest diversified property groups. The company delivers master-planned communities and medium-density housing in growing regions across Australia. In addition to residential complexes, the company’s other main areas include leasehold development, commercial cities, logistics facilities and workplaces. Stockland (ASX:SGP) had a market valuation of $7.2 billion as of May 10.
2. Scentre Group (ASX:SCG)
Market capitalization: $10.9 billion
Scentre Group (ASX:SCG) ranks second among Australia’s largest property and land companies in 2024. The company claims to own and operate Westfield’s portfolio of 42 destinations, 37 of which are in Australia. Scentre Group (ASX: SCG) has 3,600 of his retail partners representing 12,000 of his stores across its portfolio. The company is currently valued at $10.9 billion on the public market.
1. Goodman Group (ASX:GMG)
Market capitalization: $42.2 billion
Goodman Group (ASX:GMG) is the largest real estate group listed on the Australian Securities Exchange. The company is engaged in the development of logistics centers, distribution centers, warehouses, business parks and data centers. The company is present in 14 countries in Asia Pacific, Europe, and the Americas. As of May 10, Goodman Group (ASX:GMG) had a market valuation of $42.2 billion.
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