Domain predictions for 2024 cover a range of impacts for the purchasers of Australia, including a potential interest rate cut, affordability battles, strenuous renters market, and more.
1. An interest rate cut will spark demand
A cut in interest rates or other stimulus measures will spark demand and create another price upswing – a prospect likely to come to fruition in the latter part of 2024.
An alternative to a rate cut would be an easing of the mortgage serviceability buffer, speeding up access to the property market by lifting borrowing capacity and/or improving the cost of holding debt, increasing demand and resulting in swift upward price pressures on the housing market.
2. The flight to affordability
Urban spread and gentrification will be on the rise as more people chase affordability. Buyers will explore bridesmaid suburbs and areas they initially overlooked.
The flight to affordability for first home buyers will be ignited by the federal government’s Help To Buy scheme.
3. Yimbys will replace nimbys
It will be the year of progressive housing and planning reforms nationally in 2024, with the not-in-my-backyard folk swinging to yes-in-my backyard.
We will see a visionary attitude towards housing development and affordability that takes a radical approach to enable urban densification in areas where people want to live.
4. Population-driven housing demand
Domain analysis found population growth has a cumulative longer-term effect on house prices and, therefore, will continue to play a driving role in our housing markets into 2024 and beyond.
Together with a perilous rental market, it makes purchasing more attractive and may shift some to buy, given the current challenges of securing a lease.
5. Rental markets reach a tipping point
Australia’s rental market is playing a much larger role in our housing market than we have been used to – increasingly more of us are renting, and for longer.
This will continue to play out in 2024. However, a tipping point will be reached at some stage, rent growth will slow, and some submarkets will operate with a more balanced rental market.
For news and insights from experts around the industry, download edition four of the Australian Conveyancer, today.