The Australian property market has been a rollercoaster in 2023, defying expectations and leaving analysts surprised by the unprecedented rise in property prices. Affordability has experienced a gradual decline throughout the year leaving potential buyers finding it increasingly difficult to navigate the landscape with rising prices and stretched affordability.
The ongoing rental crisis, which has been a focal point throughout 2023, has led to increased attention from government and industry bodies in search of viable options. Continuing demand for rental properties is set to keep rental returns strong in 2024. The rental market will continue to exhibit strength and stability providing a favourable environment for property owners and investors.
Australia’s median house price has reached new heights, and city markets are experiencing record highs. In the quest for affordability, buyers will be looking to flock to outer suburbs with more accessible options.
Incentives, such as the Help to Buy scheme and increased first-home buyer grants, are expected to further stimulate demand for affordable housing. For first home agencies, property specialists, buyers’ agents, mortgage brokers, investment advisors, and financial planners, this presents an opportunity to guide clients towards more moderately priced options in these emerging markets.
ALC has new home packages ready to be delivered across current hotspots across South East Queensland, Victoria and South Australia.
Promising outlook ahead
While the past few years have been interesting, to say the least, the outlook is more promising. Investors can look forward to higher yields acting as a reset for the market, providing an attractive entry point and the prospect of higher returns. This presents a good opportunity to create diversified investment portfolios.
With anticipated interest rate cuts in late 2024 or early 2025, it will act as a catalyst, boosting consumer sentiment and sparking increased housing activity. This potential relief presents promising opportunities for both owner-occupiers and investors.
South East Queensland remains in high focus as its’ property sector is poised for continuing high demand in 2024. Construction pressures, housing supply issues, and inflation concerns linger, but these challenges also present unique investment opportunities.
Supply expansion for a balanced market
In 2023, instead of witnessing a real estate crash, demand maintained its relentless pace ahead of supply. The truth is we’re not building enough to meet this demand. The pressure will continue to rise by the surging population growth from overseas migration, coupled with the return of ‘Mum and Dad’ investors to the market. This will only add more weight to an already strained situation.
The key lies in the addition of more supply to the market. It’s a remedy that has the potential to ease the mounting price pressures not only in the housing sector but also in the rental market.
As the age-old economic principle of supply and demand comes into play, the addition of housing inventory holds the promise of stabilising prices and creating a more balanced market.
For investors, this presents a strategic avenue to explore. It’s not just about navigating the current market trends but actively participating in reshaping them. By considering investments in emerging markets and supporting initiatives that contribute to increased housing supply, investors can position themselves not only for financial gains but also as catalysts for positive change within the property landscape.
As Zig Ziglar said, “Stop selling. Start helping”.
This market uniqueness, led by affordability challenges, becomes an opportunity to guide clients toward projects that contribute to the supply chain.
Collaborating with ALC and our trusted network aligns with the need for increased housing inventory, benefiting both investors and owner-occupiers in achieving capital growth.
To learn more about our packages, including stock in projected growth hotspots, reach out to the ALC team today.