What does 2024 look like?

2023 has surprised many. In spite of sharp interest rate hikes, the property market has delivered capital growth. So, what could 2024 do?

As we near our year-end, this coming week of November represents the final days of new listing launches for the year. Over the next seven days we can anticipate seeing some scheduled auction campaigns for mid-December. With Christmas Day falling on Monday this year, it’s fair to assume that the weekend of Sat 16th December will be our auction finale, (unless some weeknight auctions fall during the week starting 18th.)

In one week’s time, chances are that all the stock we see on line is it – for 2023.

Our year started positively, despite interest rate movements hampering borrowing capacity for borrowers. Tight stock supply, combined with record levels of migration pushed up our national median prices.

Supply finally increased beyond the previous five year average in the later half of 2023. Our Spring market this year finally delivered typical spring listing activity, unlike the past three years. While a few of us believed capital growth may have contracted during this period, values continued to increase.

Supply is often constrained when confidence is low. “Chicken and egg” can also influence listing activity, for example; an upgrader will not choose to sell their home when it’s obvious that finding and buying a suitable home is limited. The first half of 2023 certainly exhibited this type of seller behaviour.

The resilience of our market delivered some degree of confidence to many buyers who were waiting it out for the much-anticipated ‘interest rate cliff’.

When house prices continued to rise in just about every capital city, it became obvious to many that their time to buy was ‘now’.

An increased number of investor-driven sales has certainly aided supply and we expect this to continue into the new year as investors take stock of their cashflows and consider the impact of tougher rental reforms. The market could become segmented, as the likelihood of investor-driven sales will be older-style properties in need of significant upgrades. As our labour market slowly eases, buyer appetite for unrenovated homes will return, but I don’t see this recovery taking place in the coming year. The broader challenges for the construction sector still remain.

New arrivals will continue to place pressure on our housing market and each month that offers respite from interest rate increases will continue to fuel buyer confidence.

Despite a decline in the forecast net migration, 315,000 people is still a huge number.

Renters who can buy, will buy. Rising rents are anecdotally already having that affect on many.

Should rates stay paused, 2024 I am confident that our markets will continue delivering growth. And if our reserve bank decreases interest rates in 2024, we can expect a significant run again.