What to expect from the 2024 Real Estate Market

January 8, 2024

What to expect from the 2024 Real Estate Market

The 2024 real estate market is anticipated to see a continued rise in home prices, though at a slower pace than in the previous year. Various factors contribute to this trend, including strong population growth, record net overseas migration, tight rental markets, low unemployment, and home equity gains. The commencement of stage three tax cuts in the middle of 2024, particularly beneficial for higher income earners, is expected to drive increased demand for higher-priced housing.

A significant portion of buyers with large deposits, especially those who took advantage of substantial equity boosts from the pandemic-induced boom in 2023, has insulated the market from the impact of higher interest rates. This trend is likely to persist in the 2024 real estate market, playing a role in maintaining elevated home prices.

According to the PropTrack Outlook Report, national home prices are projected to climb between 1.0% and 4.0% in 2024. While this represents a slowdown compared to the close to 6.0% growth expected by the end of 2023, the market is still anticipated to experience positive momentum.

2024 real estate market forecast for Australia

 

Population growth is predicted to remain strong but ease from the record pace seen in 2023. Rental markets are expected to stay tight, with potential stabilization in rental prices, alleviating some pressure on home prices compared to the previous year.

Despite positive factors, households are feeling the strain of higher interest rates and elevated inflation, leading to a slowdown in economic activity. Affordability concerns and weakened labor market conditions are expected to temper price growth. However, limited new housing construction, coupled with a slowdown in new home completions due to high costs and extended build times, will contribute to a continued tight housing supply against a backdrop of ongoing population growth, likely resulting in further price gains in the 2024 real estate market, although at a slower pace.

2024 real estate market prediction

Regional variations are expected, with Brisbane, Perth, and Adelaide anticipated to experience further price growth due to tight housing supply. In contrast, Sydney and Melbourne may see more subdued price growth as listing volumes return to above-decade averages. Some regions, such as Hobart and Canberra, could experience slight price dips in the 2024 real estate market. Overall, the market is poised for growth, but various economic factors will influence the trajectory and pace of this growth throughout the year.

Source: Eleanor Creagh, Senior Economist | Realestate.com.au

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