What Will 2024 Bring ? Key Fundamentals That Are Likely to Influence The Property Market !
As we move into the final month of 2023 we have a wide range of articles, reports and forecasts that will give you and your clients a terrific overview of the property market.
The growth in property prices this year has been quite phenomenal with the Gold Coast experiencing growth of 11.8% according to RP Data which is a combined house and unit summary.
With the year now in its last month, what will 2024 bring? This is a question that we are hoping to help you with in this week's report.
As our lead article last week we have taken an extract from an article released by Domain.com.au that was published on Friday.
The report with the headline "Australian housing market 2023: Prices were supposed to go down but they went up. What will 2024 bring ?" focusses on the key fundamentals that are likely to influence the property market in 2024.
It then also gives the likely outcomes for each region and city across the country.
In more local property news, a major moment in the history of Robina this week that largely went unnoticed was the much anticipated start of a new development that will transform the Central Robina area.
"Cascade", a 229 twin tower development that will become Robina's tallest residential development with twin towers of 15 levels now under development adjacent to the Robina train station.
This development is to be the first in a wave of major developments that will transform the Robina Central skyline between now and the 2032 Olympic games.
With Robina's "Green Heart" parklands under construction, the Olympic Village to be built on the Northern side of the Robina Town Centre and close to a dozen significant developments including the master planned Breakwater community poised to begin, Robina is positioned to become one of Queensland's most in demand centres.
A report on the Cascade development can be seen in our Newspaper article section below.
Also in this week's report, a property video released by SF Capital is one of the best research pieces I have seen on the property market.
The report "The Australian Housing crisis, what I have learnt from 100+ hours of research" takes you on an historical journey that gives you a step by step sequence of events that will help you understand how our property market works.
We begin this week with the Domain report released on Friday that looks at the top three factors that could drive prices higher in 2024 and the top three factors that could see prices fall.
Please see below
What could drive Australian property prices up in 2024:
Population: Unprecedented post-COVID migration and population growth will continue to send shock waves through the property market as a booming population looks for a place to live. It will continue to exert extraordinary upward price pressures on the property market.
Supply: Given Australia’s slowing housing supply in the face of a bigger Australia, the extremes of a supply shortfall will exert upward pressures on the housing market.
Relaxed lending: Given high inflation and interest rates, there are calls to review the mortgage serviceability buffer (currently 3 per cent). If this buffer is reduced, it will speed up access to the property market for many by lifting borrowing capacity, increasing demand and resulting in swift upward price pressures on the housing market. This, together with the prospect of a cash rate cut in the latter half of 2024, would most likely signal a further gear change in property price.
What that could push Australian property prices down in 2024:
Affordability: Stretched affordability could weaken prices. Wage growth has lagged behind home prices for some time, and higher interest rates have hit borrowing capacity. This combination will slow demand and exert downward pressures on prices unless incomes rise or mortgage rates fall.
Rising unemployment: RBA expects unemployment to rise as inflation slows down. More unemployment will mean greater uncertainty, fewer loan approvals, delayed demand, and greater inequality in Australia.
Inflation: If inflation sticks around for longer, further rate rises, or high rates for longer, could push more mortgage holders into financial stress and listings higher, particularly from investors who are quicker to offload properties than an owner-occupier. Rising inflation will also cut affordability and limit buying power, reducing or limiting property demand.
Likely Outcome for each City and Region
Trends to watch in 2024
A cut in interest rates or other stimulus measures will spark demand
Urban spread and gentrification are on the rise as more people chase affordability
YIMBYs will replace NIMBYs to enable urban densification
Rental markets will reach a tipping point, with rent growth to slow
Please see below My Housing Market Median House Price Data for November 2023.
Please see below RP Data's Top Regional areas in Qld over the 12 months to Dec 1 2023.
