AUSTRALIAN REAL ESTATE MARKET IN 2024 - A YEAR OF POTENTIAL TRANSFORMATIONS
In 2023, the Australian property market defied expectations, showing remarkable resilience in the face of rising interest rates and living costs. Surging buyer demand coupled with limited supply resulted in an unexpected rise in property prices, challenging the predictions of many economists.
As we venture into 2024, we're stepping into a year brimming with new possibilities for Australian real estate. Market dynamics are evolving, driven by economic shifts, population movements, and changing housing preferences. These trends are actively reshaping the market. Whether you're buying, selling, investing, or renting, this year marks a pivotal year in real estate.
Let's look at Five key trends that are reshaping the future of real estate in Australia, as analysed by our experts at SONI Wealth.
1. Continued Growth in Property Prices
Our outlook for 2024 foresees a steady rise in property values, influenced by factors like population growth, limited supply, and stable inflation and interest rates, aligning with the positive outlook shared by major financial institutions.
The momentum from 2023 is indeed expected to continue into 2024.
There is even a potential for sharp decline in inflation, paving the way for lower interest rates later in the year. This sustained growth underscores the robustness of the Australian real estate market, offering potential for investors.
2. Increased Focus on Housing Supply
Australia is in the middle of a housing rollercoaster – marked by historically low vacancy rates and supply bottlenecks. In 2024, we are anticipating an ever-greater demand for rental properties driven by an influx of migrants and population growth.
However, post-pandemic challenges, such as disrupted supply chains and workforce shortages within the housing sector, could act as significant hurdles. While the government's plan to build 1.2 million homes over the next five years is ambitious, achieving it will likely require a more multifaceted approach. Major overhauls in planning, building permits and more incentives for investors are crucial steps towards a comprehensive solution to the housing challenge.
3. Navigating Urban Strain with Vertical living
Australia’s love for spacious homes and sprawling backyards is becoming impractical, especially for outer suburb residents, straining their daily lives. A key challenge lies in the difficulties faced by local councils in adequately developing essential infrastructure to support such sprawl.
One of the fastest ways we see to tackle this problem is to build in areas with existing public transport, employment, education, and infrastructure. Expect more councils to move towards adopting vertical living, effectively addressing the critical challenge of urban strain.
4. Ongoing Rental Market Challenges
The rental market in 2024 is expected to remain fiercely competitive. With skyrocketing demand, properties are flying off the market the moment they are listed online, especially in metropolitan areas.
For investors, this presents a promising opportunity. While building new homes is a long-term process, the consistent demand from renters helps stabilize the market. Steady interest rates and record-high rental returns also make holding onto existing properties an attractive option.
5. The Influence of Immigration
Immigration emerges as a crucial factor in the 2024 real estate market. New migrants mean new demands, creating a ripple effect in both the rental and buyer markets. Migrants seek convenience, inclining towards established locations with infrastructure, job prospects and educational institutes.
This trend sets the stage for a surge in demand, particularly in inner-city locations, where the accessibility and amenities align seamlessly with the preference of the incoming population.
how can we help
At SONI Wealth, we believe a deep understanding of these trends is essential for navigating the real estate market. Our insights, blending market analysis with external forecasts, aim to guide clients in making informed decisions. In 2024, a year of new opportunities and challenges, staying informed and adaptable is key.
Book you no-obligation 45-minute consultation with our experts to make turn your property goals into reality.
Let's make 2024 a year of smart, strategic real estate decisions together!