The Australian housing market in 2023 was marked by unprecedented dynamics, often described as “record-breaking.” As we approach 2024, it’s crucial for investors and potential homeowners to understand the expected changes and trends in the property landscape. Yahoo Finance published a guide based on Domain’s research and expert opinions, particularly from Dr. Nicola Powell, Domain’s chief of research.
Property Value Predictions for 2024
In 2024, the property market is expected to experience modest growth, particularly in cities like Sydney, Perth, and Adelaide, with anticipated growth between 6 to 9 percent. However, this isn’t indicative of a massive boom. Factors like location and potential rate hikes by the Reserve Bank of Australia (RBA) will play a crucial role.
Factors Influencing Property Values
- Upsurge in Population: Driven by migration, an increased demand for housing may lead to a rise in property prices due to a supply shortfall.
- Lending Policies: Easing lending restrictions could also elevate property prices.
- Conversely, economic pressures such as wage stagnation, high living costs, and job losses could lead to a decrease in property values.
The Rental Market in 2024: Will Rent Prices Decrease?
Dr. Powell predicts a rental market “tipping point,” where affordability constraints might slow rental growth. This could lead to more shared housing situations or people moving back with their families.
Migration Impact
High migration has tightened the rental market, but this trend is expected to stabilize as many migrants have already found accommodation.
Shift from Renting to Owning
The power imbalance between landlords and tenants, along with financial pressures, might propel more renters towards homeownership.
Opportunities for Young First-Home Buyers
2024 could present opportunities for younger buyers, especially first-home buyers, due to various factors:
Government Subsidies and Incentives
- First-Home Buyer Grants: States like Queensland are increasing grants, easing the financial burden on first-time buyers.
- Help to Buy Scheme: This shared-equity scheme will aid low- and middle-income earners in co-buying homes with minimal deposits.
However, these incentives could also inflate prices in the more affordable segments of the property market.
Addressing Australia’s Housing Crisis: The Need for Supply
To solve the housing crisis, a visionary approach is required, focusing on:
Planning Reforms
- Shifting planning reforms from local to broader levels could help create more affordable housing, catering to diverse needs like aging in place and downsizing options.
Building for the Future
- The $10 billion Housing Australia Future Fund aims to deliver 30,000 new affordable houses. However, additional measures are needed to stabilize both the rental and property markets.
The Growing Importance of Space: The Rise of Granny Flats
The trend towards granny flats highlights the tight rental market and the desire for additional living or income-generating spaces. According to CoreLogic, granny flats can significantly add value to properties and offer a cost-effective solution to the housing shortage.