In the past month, property prices in capital cities such as Perth, Brisbane, and Adelaide have seen significant growth, but the average monthly increase in housing values in these three smaller cities is around 1%, not being as affected by affordability constraints as Melbourne and Sydney. The consistently low volume of housing sales advertisements indicates a cooling trend in the market.

In fact, the momentum of growth in the national real estate market has already slowed down. From the peak in May when the monthly growth rate reached 1.3%, subsequent consecutive interest rate hikes in June and November, coupled with ongoing cost of living pressure, deteriorating affordability, rising property advertisements and supply, and decreasing consumer confidence, all contribute to a gradual cooling of the market in the second half of this year.

A decline in auction clearance rates is another sign, indicating that housing demand is struggling to keep up with the increasing housing supply, and rising mortgage interest rates and cost of living pressures are intensifying affordability constraints.

In these circumstances, some economists predict that national property values will decline by 3% to 5% in 2024. While Sydney and Melbourne face greater risks due to higher debt levels, Adelaide, Brisbane, and Perth may maintain relatively stronger momentum due to reduced listings, benefits from interstate migration, and lower debt levels.

It is noteworthy that, with people reconsidering their choice of residence after the pandemic, regional migration trends are returning to normal, resulting in overall better performance in city residential markets compared to rural areas.

However, the cooling trend in the market suggests that, with the increasing pressure of cost of living and intensified affordability constraints, the national real estate market has entered a new phase. Over the next few years, property prices may gradually recover after adjustments, but there remains uncertainty in the market's performance.