As we bid farewell to 2023, it seems fitting to mark the first blog post of the New Year with a look at what we can expect from the property market in 2024. Last year was a rollercoaster of emotions, as interest rates skyrocketed and home prices generally remained strong across the board. Brisbane in particular saw good growth throughout the year. Anybody looking to rent was in for a very hard time finding a place to call home, while real estate buyers also suffered from a lack of stock on the market.
What does 2024 hold for us then? What does the dynamic living organism that is the Australian property market have in store for us – and how will that affect Brisbane? What shifts and trends are going to shape the experiences of buyers, sellers and investors? Let’s take a look at some of the factors that are going to come into play.
Interest rates took us on a wild ride in 2023, with the cash rate surging by 425 points. We’re sitting at a twelve-year high, and as a result borrowing capacity of buyers has fallen. The rates are still going to shape the industry considerably in 2024. There’s talk of a cut in the cash rate as the year progresses, which would have a positive impact on buyer sentiment. More demand could then lead to prices going up. It’s difficult to have a crystal ball on this one, but it’s safe to say interest rates will be a big factor in the coming months.
Rental Market Dynamics
Demand seriously exceeded supply in the rental market this year, which together with increasing interest rates caused massive rental price growth. This continued pressure isn’t likely to change too much in 2024, so we think you’ll see more individuals trying to buy rather than renting. The relief in interest rates some experts are predicting in the latter half of the year might cause a slowdown in rental growth – let’s wait and see what happens there.
A large driving force in increased housing demand in Australia has been population growth. There was the pandemic boom where everybody returned home from overseas, followed by an immigration boom when our borders opened and international migration started up. Migration hasn’t really let up since, and it looks like it won’t until at least 2025. International students are also back in full force after the lockdowns eased, placing their own additional pressure on the market. Sales and rentals will remain pushed to the brink as long as population growth continues in this vein.
The tight rental market and expected growth in rental prices could have the effect of making property investment appealing in 2024. We may see increased investor activity, which would have an affect on the availability of properties on the market. It could also increase the number of rental properties on the market, helping ease that pressure a bit.
First Home Buyers and Market Affordability
The challenges tenants go through to secure a rental property might incentivise first home buyers to start looking at properties to buy sooner than they anticipated. The FHOG and other policies aiming to support first home buyers will assist more individuals in moving from renting to owning a home. If there’s an upward tick in first home buyers looking for properties, it’ll have broader implications on the market and impact property prices and availability.
Regional Market Variations
There always will be a variance in how different regions and cities perform in the real estate industry. Brisbane saw significant price gains in 2023, whereas Hobart and Canberra only saw small gains. If you’re an investor, you want to be looking at the right suburbs and the right regions to maximise your investment. Opportunities vary depending on location. Talking to a qualified real estate agent will help in this regard.
In 2024 Brisbane and Australia as a whole are set to navigate through a mix of continued rental price increases, shifting housing demands, fluctuating interest rates, changing investment patterns, and regional market variations. Are you ready for the ride? It’s going to be both challenging and ripe with opportunity, depending on your position and your outlook.
It’s my goal to stay informed and agile, with my finger on the pulse of the changing dynamics. So if you have any questions about real estate in Brisbane and beyond, get in touch! I’m here to help.