Australian Property Predictions for 2024

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Australian Property Predictions for 2024

As we approach the end of 2023, Sharp Property Buyers presents our top five predictions for the Australian property market in 2024:

1. Price Growth to Continue:

Contrary to predictions of a housing market crash in 2023, property prices across Australia witnessed an upward trajectory. As we head toward 2024, the prevailing low housing supply and a surge in rents are expected to persist. National property prices are forecasted to increase between 1% and 4% in the upcoming year, according to REA Group. Affordability concerns for both buyers and renters will dominate policy discussions throughout the year.

2. Interest Rates Nearing Peak:

While concerns about inflation continue, there are indications that interest rates are nearing their peak. This brings relief to mortgage holders, signalling the conclusion of the most significant rate hike cycle in recorded history. Nevertheless, the absence of imminent rate cuts until late 2024 or early 2025 mean that homeowners must endure the ongoing elevated interest rate environment until then.

3. Housing Supply:

Recognising Australia’s housing affordability challenges, policymakers are intensifying their focus on addressing the housing supply crisis. Efforts to boost housing construction are gaining momentum and this policy emphasis is expected to continue in order to address one of the key reasons for the country’s expensive housing market. Strong population growth will continue in 2024 and this will have an impact on the property market, particularly when it comes to overseas students and available rentals. With a challenging rental market, some may consider buying a more appealing option.

4. Rents Stabilise But Challenges for Renters Persist:

While Australia remains relatively affordable for renters when compared to global markets, rapid rent increases during the pandemic and a lack of new housing development pose challenges for renters. The rental market’s recovery will be gradual, exacerbated by 500,000+ immigrants arriving in Australia each year for the next 2 years and a shortage of new rental properties. Investors are also currently making up a record low number of purchases over the past 2 years, limiting the amount of new rental properties coming to market.

5. Homes Become Greener:

Environmental consciousness, coupled with rising energy costs, drives the demand for greener homes featuring solar and battery technology. Beyond environmental benefits, these homes offer cost-effective solutions for cooling and heating, aligning with the increasing importance of home safety during extreme weather conditions.

Conclusion:

Looking back at 2023 the number of properties available for purchase remained at consistently low levels while the demand from buyers increased significantly, fuelled by a housing shortage and strong population growth. It’s likely these trends will continue into 2024. The Australian property market will continue to present both challenges and opportunities for buyers, investors and renters. Stay informed, stay ahead and let Sharp Property Buyers be your guide in the Australian real estate market. Reach out to our team today for your next property purchase.

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Matt Sharp - Director

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