Download the full January Housing Chart Pack

Equities outpace property in 2024 but fall short over the long run

Residential real estate continues to underpin Australia's wealth, estimated at a total value of $11.1 trillion - significantly higher than the combined value of Australian superannuation funds ($4.1 trillion) and the Australian stock exchange ($3.3 trillion).

However, the housing market has underperformed throughout 2024, according to CoreLogic's Housing Chart Pack for January.

CoreLogic Economist Kaytlin Ezzy said that when accounting for capital gains and dividend income, the Australian equity market outstripped property in 2024, with equities up 11.4% over the year, compared to 8.3% growth for property.

"Despite uncertainty in the global and domestic economic outlook and the cost-of-living crisis, the ASX reached a series of new record highs in 2024, buoyed by moderating inflation, coasting economic conditions and a strong outing from the banking sector."

By comparison, the total return from the housing sector, which considers both value growth and rental income, underperformed.

"Despite showing some resilience in the first half of the year, the accumulation of stock, and the higher for longer interest rate environment has seen the change in dwelling values slow, and, in some cities, shift into negative territory."

"Similarly, the normalisation in net overseas migration and the increase in the average household size has seen rental growth continue to ease over the year. "

She said these factors saw housing offer a total return of 8.3% over the 2024 calendar year, down from the 13.5% total return seen last year and approximately three percentage points below Australia's equity market.

Investing is a long-term game

Housing has outperformed equities in six of the past ten years and, cumulatively, has delivered total returns of 132.6% compared to 126.4% over the past decade.

"Whether it's housing or equities, it's normal to see some market volatility and both booms and busts are part of the usual asset pricing cycle. Regardless of asset type, time on the market has beat timing the market."

Median days on market trends higher

The Housing Chart Pack also found that after holding relatively steady around 28 days through much of 2024, the median time on market trended higher in the December quarter, at 33 days.

"Given current conditions are skewing in favour of buyers, it's unsurprising to see it take a little longer to secure a sale as buyers take their time assessing their options," Ms Ezzy commented.

Adelaide was the only capital to record a dip in the median days on market compared to last year, falling from 29 days in the December quarter of 2023, to 28 days in Q4 2024. Darwin and Canberra saw median selling times hold steady at 57 days and 44 days, respectively, while all other cities recorded an increase in median selling time compared to a year ago.

Vendor discount rate improves marginally

Although selling conditions are deteriorating for vendors, with stock levels accumulating and selling time increasing, the median vendor discount rate tightened slightly in 2024, from -3.8% in the final quarter of 2023, to -3.6% in the three months to December 2024.

"Although subtle, this suggests that sellers have been relatively realistic and are more willing to meet the market when setting initial listing prices."

"However, if stock continues to accumulate and values trend further downward, the gap could widen and vendors may have to offer larger discounts in order to secure a sale."

Rental growth continues to decelerate

The national rental index increased by 4.8% in the year to December, a notable decrease from the 8.1% rise observed in 2023 and the 9.5% growth recorded in 2022.

Ms Ezzy said this could be attributed to the ongoing normalisation of net overseas migration and the recent increase in average household size, both of which have helped to ease rental demand.

"With around 70% of overseas migrants renting when they first arrive, the continued easing in the net overseas migration trend towards pre-covid levels have helped alleviate the upward pressure on rents.

Additionally, with rental affordability near record highs, more potential renters may be delaying leaving the family home or are looking to form larger share houses as a way of distributing the additional rental burden."

"Outside of the usual seasonal uptick through Q1, we would expect to see growth in rents continue to lose momentum in 2025."

Highlights from the January 2025 Housing Chart Pack include:

• CoreLogic estimates the combined value of residential real estate held steady in December at $11.1 trillion.
• National home values fell -0.1% over the December quarter, which marks the first time the quarterly trend has entered negative territory since the three months to February 2023 (-0.6%)
• The affordable end of the market dominated growth through 2024. Nationally, lower quartile values were up 9.9% over the year compared to the 2.1% rise seen in the more expensive upper quartile. ​
• CoreLogic estimates there were 33,676 sales in December, taking the annual count to 531,573. Although up 8.3% annually, sales activity over the December quarter was down -1.0% compared to the final quarter of 2023 and -6.2% lower than the previous five-year average. ​
• The median days on market increased to 33 days over the three months to December, up from 28 days through much of 2024.
• Despite selling conditions rebalancing in favour of buyers, the median vendor discount rate tightened slightly (-3.6%) compared to the final quarter of 2023 (-3.8%).
• After peaking over the four weeks to October 27th (45,892), the flow of new listings has entered the seasonal slowdown, with just 26,423 new properties listed nationally over the 28 days to December 22nd. This is relatively in line with historic benchmarks, down just -0.8% compared to the same time in 2023 and just -0.3% lower than the previous five-year average.
• The national rental index increased by 4.8% in the year to December, a notable decrease from the 8.1% rise observed in 2023 and the 9.5% growth recorded in 2022.
• The January ‘Chart of the Month’ looks at returns on equities vs housing, finding , housing offered a total return of 8.3% over the 2024 calendar year when accounting for both capital gains and rental income, around three percentage points below the 11.4% return recorded in Australia’s equity market.

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