October Market Trends: Why Property Prices Appear to Rise Despite Declines
As we step into the final weeks of 2024, the property market continues to generate headlines—and confusion. October saw reports of rising property prices, yet those in close proximity to the market are observing clear signs of price declines. So, what’s driving this contradiction?
With listing numbers climbing rapidly and buyer interest softening, the next six weeks promise to be a fascinating period for the property market. As we transition into 2025, further increases in listings are anticipated. While logic suggests this would result in price reductions, the data may tell a different story—particularly on the Gold Coast, where prices could continue to rise despite broader trends.
Understanding the Market Dynamics
The key to this phenomenon lies not just in overall market activity but in which segment of the market is driving sales. Here’s why:
Mortgage Stress vs. Luxury Growth: Mortgage stress is affecting many on the Gold Coast, but the high-end market remains resilient. Cashed-up buyers, particularly Southerners and baby boomers with minimal mortgage obligations, are flocking to the Gold Coast and investing in luxury properties.
The Luxury Bias: In areas like Broadbeach, Burleigh Heads, and Palm Beach, new high-rise developments predominantly cater to affluent buyers. The high cost of construction has made affordable units for middle and lower markets nearly non-existent.
Renovated Homes in Demand: Suburbs such as Robina are seeing strong demand for fully renovated properties, which remain appealing due to the high cost of renovation. However, even this segment is experiencing a recent slowdown.
This skew towards higher-end sales inflates the average market price, creating an illusion of rising property values when, in reality, many individual property prices are falling.
A Historical Parallel: Lessons from 2009
This dynamic isn’t new. During the Global Financial Crisis (GFC) from 2008–2012, the Gold Coast experienced significant price declines, except for one anomaly: 2009.
That year, the Federal Government introduced a first-home buyer scheme for properties under $500,000. This drove a surge in lower-end sales, which pushed the median price downward even though individual property prices were rising.
Today, the reverse is occurring. Higher-end sales dominate, driving up the average price, despite falling values across other segments.
Current Trends: What the Data Tells Us
A recent report by Realestate.com, titled “Spoiled for Choice: New Listings Surge to Stunning Decade-High”, highlights a 20.9% increase in new property listings nationally last month—the highest October figure in a decade. Key findings include:
Capital City Trends: Every capital city saw an uptick in listings, with Melbourne and Canberra hitting record highs (33% and 31.6%, respectively). Perth and Hobart also experienced monthly increases of about 30%.
Year-on-Year Growth: Brisbane, Perth, and Canberra recorded significant year-on-year increases of 16%, 28.3%, and 19%, respectively.
Market Dynamics: Prolonged high-interest rates have prompted some homeowners to sell, while others are upgrading due to recent price growth.
According to PropTrack’s director of economic research, Cameron Kusher, this surge in listings is shifting market dynamics, giving buyers more options and reducing urgency. Auctioneer Tom Panos noted this trend is “great news for buyers and not so great for sellers,” urging vendors to adjust their expectations to meet market realities.
The Road Ahead
As we approach 2025, the Gold Coast market is at a crossroads. While increased listings typically exert downward pressure on prices, the current weighting towards high-end sales may sustain the trend of rising average prices.
For buyers, this means more options and less urgency. For sellers, it’s a reminder to align pricing expectations with market conditions.
Understanding these nuances is critical when navigating pricing trends or advising clients. The coming months will undoubtedly provide more clarity, but one thing is certain: the property market never ceases to surprise.