<?xml version="1.0" encoding="ISO-8859-1"?> <docID>335148</docID> <postdate>2024-12-12 09:41:53</postdate> <headline>Value of Australian homes may drop in early 2025</headline> <body><p><img class="size-full wp-image-242852" src="https://citynews.com.au/wp-content/uploads/2021/10/Canberra-suburbia-2021-style-GoogleMaps-resized-e1696228983941.jpg" alt="" width="966" height="644" /></p> <caption>Demand for homes may continue to be slow into 2025 but an interest rate cut could change that trend. Photo: Google Earth</caption> <p><span class="kicker-line">By <strong>Tess Ikonomou</strong> in Canberra</span></p> <p><strong>Australians ringing in the new year could see a small drop in the value of their homes, new property data has revealed.</strong></p> <p>According to research by CoreLogic, the start of 2025 may see a continuation of the "drag" on buyer demand which could result in a small decline in national home values in the first part of the year.</p> <p>The report notes a drop in interest rates by the Reserve Bank in 2025 could increase demand among prospective buyers.</p> <p>"The implementation of stage 3 tax cuts from July this year showed an anaemic response in the housing market, with national home value growth continuing to slow," it reads.</p> <p>It says the slowdown in rent growth recorded in 2024 is also expected for 2025 as demand continues to be squeezed due to high cost of living constraints.</p> <p>Any unemployment increase in 2025 may disproportionately affect renting households, as they tend to be younger people or lower-skilled workers on more precarious employment arrangements.</p> <p>But in the face of elevated interest rates and global uncertainty, the Australian housing market demonstrated "surprising resilience" throughout 2024, the report said.</p> <p>It found the number of homes had increased eight per cent on the previous year.</p> <p>The total number of home sales reached 528,000 nationally in the 12 months to November, marking a six per cent rise from the previous five-year average.</p> <p>Home values underwent a 5.5 per cent increase that same period, with the combined value of Australian homes surpassing $11 trillion.</p> <p>CoreLogic head of research Eliza Owen said the market's initial strength in 2024 gradually waned due to declining demand, rising levels of advertised supply, and a shifting outlook for inflation and interest rates.</p> <p>The national top 10 highest sales for 2024 skewed to the nation's east coast, and included Sydney's eastern suburbs along with Melbourne's Toorak.</p> <p>Across capital city markets, Perth dominated the list for the strongest growth in house values.</p> <p>All suburbs delivered growth of 30 per cent or above over the year.</p> </body>