How are housing market trends expected to evolve in 2024?
If buying a home is at the top of your wish list for 2024, then read further for our rundown on how the property market fared in 2023 and why 2024 is shaping up as potentially another big year for real estate.
Let’s take a quick rear mirror look on how home values moved over 2023.
In a year that saw five official rate hikes, and a cost of living squeeze thanks to high inflation, home prices still jumped by 7% nationally. Several cities eclipsed those gains, with double-digit price growth in Sydney (10.2%), Brisbane (10.7%) and Perth (13.5%).
But it was not just price growth that took everyone by surprise. The speed of home sales was also astonishing, with plenty of suburbs in Perth, Sydney, Brisbane, and Melbourne selling houses in as little as eight to 25 days on average.
Higher interest rates have started to take a little heat out of the market. According to CoreLogic, home values across Australia rose 0.6% in November which is the smallest monthly gain since early 2023.
The factors that pushed prices higher in 2023 are still in place, and plenty of experts are tipping house prices will keep rising.
Three main drivers look set to support house prices growth in 2024. These include:
Population growth is rebounding strongly, driving by high immigration levels. More people generally mean more demand for housing.
A recent Domain report says “unprecedented” population growth will exert “extraordinary upward prices pressure” on the property market.
On the supply side, we are just not building enough new homes.
Australia’s housing shortage made headlines throughout 2023, and it does not look like it will get better any time soon. Building approvals for new homes are reported to be well below average levels.
A rental market that is as tight as a drum
Anyone looking for a rental can face an uphill battle. Vacancy rates are at record lows, making rental conditions tough. This could encourage more people to buy a place of their own through one of the government’s low deposit buying schemes. The First Home Guarantee scheme for instance, lets first home buyers get into the market with just a 5% deposit and zero lenders mortgage insurance.
Most experts are tipping house prices will keep rising in 2024, though maybe not at the breakneck speed seen nationally in 2023.
Domain is forecasting house prices to jump 5-7% nationally, and in each capital city by:
We could be facing another bumper year of price growth, and if buying is on your radar, it may be worth trying to buy sooner rather than later to potentially avoid paying more.
A: In 2023, despite five official rate hikes and high inflation, home prices nationally jumped by 7%, with cities like Sydney, Brisbane, and Perth experiencing double-digit price growth.
A: The speed of home sales in 2023 was notable, with many suburbs in Perth, Sydney, Brisbane, and Melbourne selling houses in as little as eight to 25 days on average.
A: While higher interest rates have started to cool the market slightly, experts still anticipate house prices to continue rising in 2024, albeit at a potentially slower pace than in 2023.
A: Key drivers for house price growth in 2024 include strong population growth driven by high immigration levels, a housing undersupply, and a tight rental market.
A: Domain forecasts house prices to jump 5-7% nationally, with specific predictions for each capital city, including 7-9% in Sydney, 2-4% in Melbourne, and 7-8% in Brisbane.
A: "Unprecedented" population growth is expected to exert "extraordinary upward prices pressure" on the property market due to increased demand for housing.
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Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
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