2024 Property Outlook

Posted by Roy Azzi

I always think of January as a reset and an opportunity to look back over the previous year and what came from it. There is no secret: 2023 was a challenging year, and it felt like the year that kept on giving, and I don’t mean that in a good way. 2023 was a year that delivered five interest rate rises (making it 13 rises since May 2022), unprecedented low levels of property, and a constant rise in construction costs.

Despite those challenges, property was still in very high demand, and at Blue Wealth, we had a record number of client meetings. While the challenge was borrowing capacity, the demand for property was as high, if not higher, than in previous years.

I think 2024 will be a year of three parts.

January to April will be a flow on of 2023 where property availability will be challenging, with some opportunity. Investors will be keen to invest but restricted by borrowing capacity.

May to July will come with lots of positivity through all media outlets, mainly looking forward to a drop in interest rates. This will give developers the comfort they need to release projects they have worked on for the past 18 months. Investors will see increased property availability and a possible rate drop.

Finally, August to December will see a market that is out of control. As multiple interest rate drops provide more comfort, an increased borrowing capacity, and increased dwelling prices from month to month, investors will be at record numbers.

In the meantime, those who already own properties should be congratulated for keeping their cool through the last year of uncertainty. You should have benefitted from rental increases as Australia sees national vacancy rates of as low as 1.1%. And this is just the beginning of a 24-month rental crisis until Developers start building again and stock hits the market. Immigration will continue to grow, putting considerable pressure on what is already a housing shortage. And property prices will continue to grow due to a lack of availability in most suburbs. Auctions will end the year with clearance rates of over 75% nationally. (Note they were 63.4% in 2023).

We see apartments on the eastern seaboard of Australia grow and, in many cases, outgrow how house prices have grown in percentage terms.

I am working very closely with some of the country’s largest Developers and getting our pipeline for the year ready. We have some amazing opportunities with single contract house and land in Melbourne, townhouse opportunities in the northern corridor of Melbourne, and apartment options in Melbourne’s southeast and the Sunshine Coast. We are monitoring the NSW market but are conscious of price points and rental yields.

My advice for 2024 is to stay close to us. We’ll keep delivering our economic updates and research stories so you know what’s happening in property investment. And we’ll ensure that when you’re ready to invest, you’re investing in only the best opportunities.

I look forward to seeing you around the office.

Posted by Roy Azzi, on 13th Feb 2024