Many industry experts, including Steve Douglas, Chairman of SMATS Group, are forecasting house prices to boom in 2024, largely due to a lack of supply and an immigration boom.
However, these aren’t the only factors driving property prices in 2024, with affordability being one of the biggest variables, as well as the RBA’s movements with interest rate hikes.
Predictions for 2024
National growth of between 5% to 7% can be expected in house and unit prices going into 2024 and then surge by 9.4 per cent in the year to June 2025, with Domain predicting the strongest increases in house prices in Brisbane 7-9%, Sydney 7-9% and Adelaide 7-8%.
Locations where unit prices are set to increase more strongly include Brisbane 4-6% and the Gold Coast 4-5%. Melbourne can expect less growth with house prices predicted to grow 2-4%.
Regional VIC, NSW and QLD, can all expect house growth of 2-5%. Regional NSW is also forecasted to see 2-3% increases in unit prices.
Drivers of growth in 2024
Strong population growth is set to remain a feature of the housing market. The recent temporary record strength in migration will continue influencing our housing markets. 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.
Australia’s projected population by 2029 is 28,946,317, an increase of close to 3 million people.
Domain’s 2024 Outlook report, also predicts a cut in interest rates or other stimulus measures will spark demand and create another price upswing.
Additionally, affordability will remain a predominant factor driving property prices in 2024, with Perth, Adelaide and Brisbane being the most affordable based on annual income and average dwelling prices.
Australian buyers luring overseas buyers
The Australian dollar has declined from above 71 cents to just 63 cents against the US dollar since January.
Australia’s low dollar value and the high probability that it will rise again in the near future, is another major draw for overseas buyers according to Steve Douglas of SMATS Group.
“In many countries around Asia, property prices are relatively flat, or like Hong Kong, falling, so Australia’s promise of capital growth is only enhanced when buyers factor in the potential for their Aussie property asset delivering a currency-linked dividend as well”.
“Add in interest rates at or near a peak, and I foresee Australian property being in high demand from international and expatriate buyers,” says Mr Douglas.
Where should property investors be looking
Investors should be looking at locations which are not only affordable but also investment grade. Many locations in both Western Australia and Queensland are set to skyrocket, with areas surrounding Brisbane in particular gaining a lot of traction due to the hosting of the olympic games in 2032.
Coupled with low vacancy rates, these locations are also expected to reap strong rental returns for investors. Perth for instance saw vacancy rates of under 1.0% in 2023 and an average weekly rent of $693 – an increase of 17% YOY.
So if you’re looking to capitalise on the 2024 property market and get in before the herd, our team of experts are ready to help you kickstart your investment journey. Book a free consultation with one of our Senior Property Wealth Planners to get started today!
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