Reflecting on the Australian property market in 2023, we witnessed resilience and growth amidst economic headwinds. Looking ahead to 2024, expert analyses from CoreLogic, Domain, Forbes, and REA provide a multifaceted view of the trends and expectations shaping the property landscape.

2023: A Resilient Market Amidst Challenges

• CoreLogic’s Overview: Despite rising interest rates and affordability issues, the housing market remained robust, with notable recovery in housing values and impacts from overseas migration.
• Transaction and Migration Trends: A decrease in transaction volumes contrasted with an increase in new listings and short-term resales, driven by mortgage serviceability concerns. Record migration levels further exerted upward pressure on home values and the rental market.

2024 Outlook: Diverse Predictions and Trends

1. Market Dynamics (Domain & Forbes):
   • Interest Rate and Affordability: Potential interest rate cuts or easing of mortgage serviceability buffers could enhance borrowing capacity and impact buyer sentiment.
   • Urban Development: Shifts towards affordability in ‘bridesmaid suburbs’ and a move from NIMBY to YIMBY attitudes are expected, favoring urban densification.
   • Economic Forces: The market will be influenced by GDP growth, labor market dynamics, and inflation trends, with interest rate cuts anticipated towards late 2024.
2. Capital City Variances (Forbes):
   • Regional Performance: Sydney and Melbourne may see slower growth, while Perth, Adelaide, and Brisbane could maintain higher growth rates.
   • Investor and Buyer Dynamics: The roles of domestic and foreign investors are evolving, with first home buyers facing challenges but also finding opportunities in specific market conditions.
3. Rental Market and Consumer Sentiment:
   • Rental Trends: A potential slowdown in rental price growth is predicted, influenced by increased supply and government policies aiding first home buyers.
   • Consumer Perspective: Pessimism prevails among prospective buyers, concerned about rate rises and living costs.
4. REA’s 2024 Predictions:
   • National Property Prices: PropTrack forecasts home prices to rise between 1% and 4% nationally, with a more significant increase of up to 8% in some capital cities.
   • Key Influences: Stage three tax cuts, soaring population growth, and lagging housing supply are expected to drive this growth.
   • Regional Variations: Brisbane, Adelaide, and Perth are tipped to outperform due to tight supply, while Sydney and Melbourne might experience more subdued growth.
5. Additional Factors (REA):
   • First Home Buyers: Rapidly rising interest rates have chilled first-home buyer activity, which is likely to continue into 2024.
   • Investor Activity: Tight rental markets and strong rental price growth are expected to continue, enticing investor activity and underpinning house price growth.

Conclusion: The Australian property market in 2023 demonstrated remarkable adaptability, and the outlook for 2024 points to a landscape shaped by economic, demographic, and policy factors. While challenges in affordability and borrowing costs persist, opportunities for growth and investment remain, particularly influenced by population trends, government initiatives, and changing urban development attitudes. The year ahead promises a dynamic market, offering a mix of challenges and opportunities for buyers, sellers, and investors.

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