With 2023 now behind us and 2024 almost in full swing, we can now dissect last year’s numbers – and the news is good!
According to CoreLogic’s National Home Value Index (HVI) national home prices rose by 8.3% across the country last year.
This is a significant turnaround from the -4.9% drop experienced in 2022, but understandably well behind the incredible surge of 24.5% recorded throughout 2021.
December’s 0.4% increase saw 2023 finish on a positive note, albeit a small one!
Australian Monthly growth percentages peaked at 1.3% in May and despite rate rises in June and November, as well as persistent cost of living pressures and affordability challenges, the Australian property market continued on an upward trend.
Across the combined capital cities index, dwelling values were up 9.3% in 2023, more than double the 4.4% rise recorded across the combined regional index.
So what will 2024 bring for our housing market? That’s a good question!
Sure there may be some economic headwinds still to greet the property market but according to experts, there will also be a combination of growth drivers that should lead to a period of strong property price growth in 2024.
These could be due to the following:
- Surging migration that may create unprecedented demand for dwellings
- Cost of new construction affecting financial viability
- Historically low unemployment rates
- Federal and State Government spending, initiatives, and infrastructure projects
- Low time on market for quality real estate assets
- Historically low vacancy rates and skyrocketing rents
- Interest rates are near their peak if they haven’t already peaked
- A return of international demand for Australian property
Generally speaking, the early stages of a new property cycle can be a window of opportunity for buyers.
Both buyers and sellers have re-entered the market considerably already and property values have been steadily increasing month on month since early 2023.
Multiple growth drivers are expected to lead to continued property price rises throughout 2024, but price growth is likely to be a little slower than the double digit growth many markets experienced in 2023.
According to current sentiment, investor interest is already picking up, and as they return to the market, so do increased property prices.
As the news gets better for property and the media reports rising auction clearance rates, rising house prices and increasing consumer confidence, a whole group of new buyers are expected to enter the property market, buoyed by a strengthening economy, growing employment, and renewed confidence in the direction Australia is heading.
The trajectory of interest rates through 2024 will be a key factor influencing housing trends.
Although another cash rate hike can’t be completely ruled out, the trend towards lower inflation, weakening economic conditions amid low consumption and a loosening labour market, suggests another rate hike is looking increasingly unlikely.
At the end of December, financial experts were fully pricing in a 25 basis point rate cut by June 2024.
If interest rates do move lower, there is a good chance we will see a lift in consumer sentiment and a more positive trend in housing activity throughout the next 12 months.
Want to know what your property is worth now? Contact an Elders expert in your area here.