My 2024 Property Market Crystal Ball

My 2024 Property Market Crystal Ball

By Jeremy Stewart

As we enter 2024, I’ve been asked what my thoughts and predictions are for the real estate market for the year ahead. So here they are.

Housing Supply – There will continue to be limited properties available both for sale and for rent. Local council building approvals are still low due to the cost of materials, labour and other costs, as well as tradesman shortages, which means we are not seeing many new homes being built or finished. Another issue facing many Sellers is “If I sell my property to make a profit, where do I go?” Yes, you may be able to sell your house for a great price, but this is only once piece of the puzzle. With increased prices and very low levels of stock, people are forced to go into further debt to purchase a superior home, or reduce their expectations and buy something that is not as good as what they already had. Unless you have a specific reason for moving, such as relocating for work or downsizing, then the added stress of selling and buying, just to make a few dollars, is not always worth it.  I expect the housing supply crisis featured in the media to continue throughout the year.

Prices – The basic principle of supply and demand are a driving force in the market. While there are more buyers than there are sellers, or more renters than there are landlords/investors, then prices are going to continue to increase. Many of the proposed larger scale social and community housing projects are still some time away from completion, and won’t available in the immediate future. If the Government continues to lack providing incentives to potential investors to purchase established houses for tenants, we can expect to continue to see rent prices increasing.

Regional areas – Many regional areas are undervalued compared to many cities and towns across the country, so savvy buyers will be looking to target these areas. People looking for lifestyle properties in regional areas will also consider the cost of living, and look for areas that provide solid fundamentals like good job prospects, quality education and medical facilities, climate/weather and much more. We are also seeing an increase in tenants making the move to regional areas, as the rent is more affordable than their metro counterparts. I would expect that the property market in regional areas will perform well, as well as the local economy.

Interest rates – In 2023, a high proportion of the countries top 25 economists got it wrong when making predictions.  They have access to exclusive data and are the experts in the field, so I take everything they predict with a pinch of salt. Being no expert in the field I will put my thoughts forward. I believe that we will still see rates go higher throughout the year, and then stabilise. Inflation will get to a point where it is no longer effective, and we will need a shift similar to what’s happening across the ditch in NZ. With our federal government not prepared to lift the GST rate, the RBA only has one lever to pull when trying to bring this down. In reality, interest rates are at the same level as around 2010/11, which was not all that long ago. The difference is that we now live in a society that has access to news constantly. In saying all of this, it is down to the RBA and the previous government taking reducing rates to an unsustainable level, and making unkeepable promises in the media that rates would not rise until 2024. So while it is not all bad new, it is still going to be a while before rates start moving in a downward trend.

Technology – This will continue to shift how real estate moves and business is done. In the USA, there are some amazing trends and developments happening, and we in Australia tend to follow suit in the years afterwards. With things like DocuSign, Facetime videos and virtual 3D technology, buyers no longer need to physically view a property to be able to purchase it. We are seeing this a lot more and I expect this trend to continue through 2024.

So, there you have my thoughts and predictions for the year ahead, based on my experience in the industry. I look forward to seeing what comes of the upcoming year, and would love the opportunity to discuss my thoughts with you at any time!