As we fast approach the end of 2023, the Australian real estate landscape is showing clear indications of the trends that will dominate in 2024.
From shifts in buying behaviours to the rise of urban spread, 2024 is predicted to be another dynamic and exciting year in Australian property.
Buyers and sellers must remain informed and strategic in navigating the evolving property market.
As we usher in 2024, it’s evident that adaptability is key.
This is why I always advise clients to buy with purpose, not pressure to combat the effects of FOMO in a market that looks to be as competitive as ever.
After decades in the industry it’s become apparent that while things might seem different on the surface, there are some fundamental aspects to property that remain unchanged.
With that in mind, here are some of the key trends to watch for and my top tips for navigating the property market in 2024:
Extended property time frames will continue
The general time frame for buying a home has been stretched, with it now common for the process to take up to a year.
This year has seen the slowest conversion rates yet, a trend that is expected to persist in the coming year.
Fierce competition in high demand areas lead potential buyers to spend more time searching for the perfect property or spend longer waiting for the right opportunity.
Financing and loan approval is another area of delay, with stricter lending criteria and diminished borrowing power putting a dent in buyers’ budgets.
Lastly, time-consuming inspections and settlement processes tend to draw out buying time frames as buyers are mindful of doing their due diligence.
The rise of more new apartments
While the surge in new apartments entering the market has given buyers more options to choose from, freshly built housing comes with their own set of risks.
Due to tighter time constraints around the construction of these properties, building defects and the lack of insurance are a deadly combination for prospective buyers.
A NSW Government report found that 39 per cent of all residential apartment buildings constructed between 2014 and 2020 harboured serious defects in the common property.
Some 23 per cent had defects related to waterproofing and 14 per cent were to do with fire safety.
This is a problem that isn’t going away as 50-60 per cent of these defects are attributable to poor design and the clear conflict of interest in certification paid for by the builder/developers.
FOMO rears its head in purchasing decisions
Fear of missing out (FOMO) continues to be a significant factor influencing purchasing decisions when cool heads ought to rein.
First-home buyers keen to leave the rental market are especially vulnerable to its effects.
Despite the fastest interest rates hikes in a generation, Sydney property prices have defied all expectations to recoup the value lost during last year’s slump.
AI makes its mark on real estate
While many agents have embraced AI for content creation, the consensus is that a human touch remains a critical part of service delivery.
AI’s role during the Covid era showcased its potential to streamline processes, but the importance of physical inspections in the process of ‘test driving’ a home can’t be undermined.
At a minimum, two physical inspections need to take place for buyers to get a feel for a property.
In the year ahead, the real estate industry will continue to integrate AI without compromising on the necessary physical elements of buying and selling property.
Single and grey divorce buyers on the rise
According to the latest census data, single households are becoming more prevalent than ever in Australia.
This shift heralds an era where single buyers are able to achieve the sense of security that property ownership brings.
Since 2022, single female property buyers have been the fastest growing home-buyer demographic despite the challenges of raising a deposit and servicing a mortgage solo.
Grey divorcees are also a growing segment keen to downsize from the former marital home to a lower maintenance home.
Generational inheritance is on the rise
A notable increase in generational inheritance is influencing buying capacities and choices.
As Baby Boomers reach their golden years, many are considering early inheritance as a way to pass on considerable resources to the next generation of property buyers.
As property prices spiral out of reach, generational inheritance is the only way many Australians can realistically breach the property market.
Others simply inherit the property their parents leave to them.
Either way, this can be a lifeline for Aussies to gain a permanent roof over their heads so long as they ensure their tax liabilities are taken care of.
Slim pickings persist in the market
Property stock levels remain low, leading to competitive market conditions that show now sign of abating in 2024.
Since listings peaked in March 2022, the number of new listings have been in a downward trajectory.
Data indicates new listing volumes in June 2023 were 14.8 per cent lower compared to June 2022.
Property – especially A-grade properties – will remain as desirable as ever meaning there will be no shortage of competition for freestanding family homes.
Property prices will continue to remain stable with little wiggle room to negotiate except for where there is a glut of lower quality builds such as apartments in less desirable locales.
More investors are selling up
An uptick in investors selling properties, often with tenants still in place, is indicative of the effects of mortgage stress on landlords.
Quick sales like this present challenges for first-home buyers who are in the market for these types of properties but are hamstrung by the presence of existing tenants.
Given this scenario, potential buyers might benefit from temporarily staying with mum and dad in order to secure the property they want.
Cashed up buyers stand to benefit from landlords divesting themselves of expensive properties if they keep their eyes and ears open to opportunities as they arise.
Interest rates to come down and prices to go up
With interest rates tipped to fall at some point in 2024, we will see more buyers seeking entry into the market.
The government’s bid to fix housing affordability and ensure more first-home buyers gain a foothold onto the property ladder will drive significant activity.
There’s a prevailing sense of urgency to lock in purchases now to nab a home before prices rise even higher.
This further fuels the sense of FOMO and exacerbates the likelihood of a hot property market in 2024.
Ashfield a standout Sydney suburb in 2024
As increasing numbers of buyers are priced out of popular inner west suburb Marrickville, Ashfield is fast becoming a popular stand-in.
With sales surpassing the million-dollar mark, Ashfield is a decidedly robust market for apartments and the rare freestanding house.
Hurlstone Park, another Marrickville stand-in, has already grown by 14.4 per cent in six months to reach a current median value of $2,037,000, hinting at Ashfield’s future trajectory as the next big thing.
Urban spread and gentrification on the rise
Affordability issues are pushing buyers to explore outer city suburbs with unique offerings like the waterside locations of what was once working class Balmain.
In 2024, the gentrification of more suburbs will continue as trendy and urban buyers make their mark.
Competition for properties on the outskirts of the inner west is fierce as buyers snap up the few remaining freestanding houses still in relatively close proximity to the city and urban lifestyle amenities.
Transport links and infrastructure investments drive buyers
The NSW Government’s focus on enhancing roads, schools, and transport amenities like the Metro link portends rising demand in areas that will benefit from improved infrastructure.
These newly accessible suburbs will become highly sought after areas to buy in.
Out west, the boom in new properties in areas like Rouse Hill, accompanied by the establishment of the Metro Northwest Line, have caused prices in these suburbs to almost triple.
The promise of a train station from Five Dock to the Bays is set to hike up prices in the area as keen prospective buyers clamour for a slice of waterfront views and cosmopolitan living.