As per the latest Home Value Index report from CoreLogic, the Australian real estate market saw a certain degree of recovery in 2023. Nationally, property prices increased by an average of 8.1%, though still below the growth rates seen in 2021.

Among the capital cities, Sydney's property prices rose by 11.1%, with a median price of 1,128,322 Australian dollars. Melbourne experienced a 3.5% increase in property prices, reaching a median of 780,457 Australian dollars. Brisbane witnessed a significant 13.1% increase in property prices, with a median of 787,217 Australian dollars.

It is noteworthy that the disparity in the growth rates of property prices between different cities is becoming more pronounced. Cities like Perth, Adelaide, and Brisbane saw monthly increases of over 1%, while the growth rate in Melbourne and Sydney slowed down after the interest rate hike in June.

This difference is primarily attributed to the supply and demand dynamics. In cities like Perth, Adelaide, and Brisbane, housing affordability is relatively stronger, and advertised inventory continues to stay below average levels.

In contrast, property price growth in remote areas has been relatively subdued. The overall growth rate for capital cities was 9.3%, more than twice the 4.4% growth in remote areas.

However, signs of a slowdown in property price growth appeared in the last few months of 2023. Property prices in December only rose by 0.4%, marking the smallest increase for the year. According to CoreLogic's predictions, property prices in early 2024 are expected to experience moderate growth.

The key factor influencing the real estate market will be changes in interest rates. Currently, the likelihood of another interest rate hike seems to be diminishing. Financial markets and economists anticipate that millions of Australians will receive some relief from interest rate cuts in 2024. However, Australia's four major banks have varying forecasts regarding interest rate cuts, and the specific timing and magnitude may differ.