The question of whether and when interest rates will drop is a significant one, and will be a key factor influencing housing trends.

In November 2023, the Reserve Bank of Australia raised the official interest rate to 4.35%, a 12 year peak, in response to inflation. This increase reduced borrowing capacity significantly (around 30%) but does not necessarily indicate a substantial decline in housing prices for 2024.

Predicting the exact direction of interest rates remains challenging, but CoreLogic analysis suggests further significant hikes seem less likely due to weakening economic conditions and stabilising inflation. A mid-year rate cut could revitalise the housing market, particularly in the latter half of 2024.