Australian House Prices Retreat for First Time in Nearly Two Years

SYDNEY—Australian house prices recorded their first monthly decline in almost two years in December, but relief for the market appears close amid growing speculation that the Reserve Bank of Australia will start cutting interest rates from February.

House prices rose 4.9% in 2024, but December registered a 0.1% drop, the first since January 2023, according to property research group, CoreLogic.

The month saw deepening price falls in Melbourne and Sydney, the country’s two biggest property markets, while other state capitals also showed signs of weakening.

A national housing shortage and falling unemployment are lending some support to house prices, but elevated interest rates, poor affordability levels and low confidence are now taking a toll on the market.

“The decline in values is no surprise,” said CoreLogic’s research director, Tim Lawless. “This result represents the housing market catching up with the reality of market dynamics.”

“Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher,” he added.

There is widening evidence of weakness in the property market, with auction activity cooling from their highs, particularly in Sydney where successful sales at auctions have fallen to just above 50% of properties listed.

Still, the tide could turn again for house prices, after the RBA indicated in December it is growing more confident that inflation will soon return to target, paving the way for the start of interest rate cuts.

Economists are forecasting another year of modest gains for house prices, with the pace of increase largely dictated by the timing and extent of RBA rate cuts.

The RBA kept the official cash rate steady at 4.35% through 2024, putting it at odds with many of the world’s major central banks that have cut aggressively.

A shortfall in housing supply is also expected to remain significant for a long while yet, with the accumulated shortfall now estimated at around 200,000 homes, said Shane Oliver , chief economist at AMP.

Leading Australian development manager Fortis has secured a landmark off-the-plan sale at Richmond Square, with high-profile hospitality entrepreneurs Bruce and Chyka Keebaugh purchasing a 550sqm penthouse residence in Carmine House, establishing a new price benchmark for apartment living in Richmond.

The purchase underscores the continued demand for premium, amenity-rich residences in Melbourne’s inner east.

The transaction marks a significant milestone for the $330 million mixed-use precinct, reinforcing buyer appetite for integrated, lifestyle-led developments.

Richmond Square comprises two residential offerings – Carmine House and Wiltshire House – alongside a 57-room boutique hotel, strata office space and a curated mix of retail and lifestyle operators.

As part of Carmine House, residents have access to hotel-style amenities and services, including concierge, housekeeping, dry cleaning and in-residence food and beverage delivery.

Best known for building The Big Group into one of Australia’s leading luxury hospitality and events businesses, the Keebaughs were drawn to the precinct’s integrated lifestyle offering and its proximity to Melbourne’s hospitality, cultural and sporting precincts, while remaining well connected to the Mornington Peninsula, where they spend much of their time.

As well, Chyka is well known to Australian audiences as one of the original stars of The Real Housewives of Melbourne, appearing across three seasons of the hit reality series.

Alongside her business ventures with Bruce, she has built a public profile as a lifestyle authority, authoring two books on home and entertaining, Chyka Home and Chyka Celebrate.

“We weren’t simply looking for a luxury apartment,: the couple said. “We were looking for a home that delivers an exceptional lifestyle every day. The combination of design, walkability, security and the broader precinct vision for the broader precinct immediately stood out.”

Jordan Winada, Head of Acquisitions (Commercial) Victoria at Fortis, said the result highlights evolving priorities at the top end of the market.

“This sale reinforces that premium buyers are prioritising the complete lifestyle experience,” says Winada.

“They’re increasingly looking beyond the apartment itself and assessing the quality of the surrounding neighbourhood as well.”

Sean Cussell, Director at Christie’s International Real Estate Victoria, who negotiated the transaction, said the result reflects the lack of comparable product at this level of the market.

“There’s simply no direct comparison for this in Richmond. It’s not just an apartment; it’s part of a fully integrated precinct combining residential, hotel, workplace and lifestyle amenity,” Cussell said.

“Buyers are increasingly assessing the broader offering, from amenity and walkability to service and convenience. Projects that deliver a complete lifestyle experience continue to outperform.”

The sale contributes to Fortis’ strong national performance, with the business recording more than $124 million in sales since March, the last three all record-breaking penthouse sales across the country, reflecting sustained momentum across its portfolio and continued appetite for premium, design-driven developments.

This follows Fortis’ recent record-breaking Ruby House penthouse sale in Sydney’s Double Bay, which set a new benchmark for apartment living in the suburb and underscores the strength of demand at the ultra-premium end of the market.

Richmond Square will announce its hospitality and lifestyle operators in the coming weeks as the project progresses towards completion this year.

Australian House Prices Retreat for First Time in Nearly Two Years

House prices rose 4.9% in 2024, but December registered a 0.1% drop

Hospitality entrepreneurs Bruce and Chyka Keebaugh have set a new price benchmark for apartment living in Richmond with their purchase of a Carmine House penthouse.