National dwelling prices are projected to further recover this year as limited housing supply will counterbalance the impact of higher interest rates. Constrained supply and potential rate cuts will continue to lead steady price growth all the way into FY25.

The year ahead

Despite high interest rates, constrained supply will likely dominate the factors influencing property prices in the short term and result in continued price gains in most markets during FY24. 

KPMG forecasts national house and unit prices to continue to rise throughout this financial year, by 3.9-4.9% and 2.5-3.1% respectively.  

However, the low levels of housing supply in the short term will counterbalance the adverse effects of interest rates, as well as the build-up of pressure for the market to cool down. As we anticipate housing supply to remain limited due to factors such as scarcity of available land or slower construction activity, it will continue to offset the downward forces driven by interest rates and push national dwelling prices upward.

Anticipated rate cuts

Anticipated rate cuts are predicted to drive accelerated growth in house and unit prices in FY25

House prices and unit prices are projected to accelerate further in FY25 as dwelling supply continues to be limited throughout the forecasting period, coupled with the anticipated rate cuts. Positive market dynamics, increased investor sentiment, and potentially relaxed lending conditions driven by anticipated rate cuts will all contribute to heightened demand and fuel price growth.

In FY25, national house prices and unit prices are predicted to grow by another 5.0-6.3% and 3.2-4.0% respectively.


Complex market dynamics across cities and property types

In the next 12 months, house prices are expected to further recover, except for Darwin. House prices growth in Perth is expected to be strongest. 


KPMG’s team of expert economists analyse the residential property market, providing historic and forecast figures regarding dwelling prices by property type and market.

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