1. Home values in Australia are forecasted to increase in 2024, despite reduced borrowing capacity and higher interest rates. LJ Hooker’s head of research, Matthew Tiller, predicts that the number of properties on the market will challenge this growth.
2. The first interest rate cut since early 2020 is expected at the end of 2024. Tiller suggests that the Reserve Bank of Australia (RBA) will likely keep rates on hold for a long period before implementing rate cuts.
3. Tiller identifies suburbs that are poised to perform well in 2024. Quinns Rocks in Western Australia and Mandurah, located south of Perth, are expected to see growth due to their affordability and low stock. In Brisbane, Taringa and stabilizing areas on the Gold Coast like Elanora and Arundel are predicted to be attractive to buyers.
4. Sydney’s hotspots include Dee Why and Glenmore Park, where falling median house prices offer good value for families. In Melbourne, Croydon South, Carrum Downs, and Bayswater North are expected to grow in popularity due to falling values. Payneham in Adelaide is noted for its steady growth, with Plympton Park also showcasing buyer demand.
5. Homeowners are likely to capitalize on recent price growth by using their equity to upgrade or downsize. Additionally, struggling mortgage holders may sell with confidence, knowing they have some equity in place.
Forecasting Changes in the Property Market and Interest Rates
As 2024 progresses, the Australian property market is poised for significant changes, with the first interest rate cut since early 2020 expected towards the end of the year. Matthew Tiller, Head of Research at LJ Hooker, predicts a shift in the market dynamics, with certain suburbs emerging as hotspots for property investment and growth.
2024 Property Market Outlook
Despite the challenges of higher interest rates reducing borrowing capacity, Tiller forecasts a continued increase in home values, albeit challenged by a rise in the number of properties on the market. In 2023, national home prices across Australia rose by 5.52%, and this upward trajectory is expected to continue throughout 2024.
Interest Rate Cuts and Market Expectations
The anticipation of interest rate cuts in 2024 has garnered attention, with many mortgage holders eagerly awaiting the commencement of the rate-cutting cycle. Tiller suggests that while some market predictions indicate earlier rate cuts, a long period of rates on hold is more likely, with cuts expected closer to the end of 2024.
Identifying Potential Property Hotspots
Tiller points to suburbs where values have steadied or fallen in the last year but will attract buyers due to affordability. In Western Australia, Quinns Rocks is highlighted for its low stock and affordable property range. Mandurah, located south of Perth, is also expected to perform well. In Queensland, Taringa in Brisbane and parts of the Gold Coast like Elanora and Arundel are identified as attractive due to stabilizing prices.
Sydney, Melbourne, and Adelaide’s Emerging Hotspots
In Sydney, Dee Why and Glenmore Park are noted for offering good value, with Glenmore Park’s median house price falling to $1 million. Melbourne’s Croydon South, Carrum Downs, and Bayswater North are expected to grow in popularity due to falling values. In Adelaide, Payneham and Plympton Park are highlighted for their steady growth and solid buyer demand.
The property market in 2024 is set to experience significant shifts, with the anticipation of interest rate cuts and the emergence of new property hotspots. Understanding these trends will be crucial for investors and homebuyers looking to capitalize on the evolving market dynamics.