As 2023 comes to a close, homeowners and potential buyers alike are pondering what the next year holds for the property market.
Both Australia and New Zealand have seen their fair share of fluctuations, and as we step into 2024, there are various factors at play that could shape the market landscape. Here’s a comprehensive forecast to guide you through what to expect.
The discussion around interest rates never truly goes away, and for good reason. Current projections suggest a gradual decrease in rates in New Zealand from 5.25 per cent to 4.25 per cent in 2025. For Australia, an Australian Financial Review survey of 42 economists suggests the RBA will likely cut rates in August 2024.
Stable growth is expected in property values across major cities and regional areas. Sydney and Melbourne are likely to remain hotspots, but don’t discount smaller cities like Adelaide, Hobart, and Wellington. These cities offer excellent value for money and often come with lifestyle perks like shorter commute times and a sense of community. Regional areas, in particular, are expected to continue their ascent in popularity, thanks to the remote work trend and the search for a quieter life.
Green living is more than just a buzzword; it’s becoming a significant factor in property valuation. Features like solar panels, rainwater harvesting systems, and energy-efficient designs add tangible value to a property. Given the increased awareness and governmental incentives around sustainability, investing in eco-friendly upgrades could pay off considerably in the long run.
Technology and Digitalisation
The property market is not immune to the sweeping changes brought about by technology. Virtual property tours and smart home features are increasingly becoming the norm rather than the exception, and blockchain transactions are getting closer to adoption throughout the property industry.
Property Types and Trends
The transition from pandemic life has left its mark on what homeowners and buyers are looking for in a property. Larger homes with dedicated workspaces and outdoor areas continue to be in high demand. However, smaller apartments and townhouses in well-connected areas are also seeing a surge, especially among younger, first-time buyers and investors.
Keep an eye on government policies and subsidies that may affect the property market. First-home buyer grants, stamp duty waivers, and other financial incentives can dramatically affect buying trends and property values. Being well-informed about these can give you a strategic advantage whether you’re buying, selling, or holding.
With the property market showing signs of stability and growth, 2024 could be an ideal time for investment. But where should you put your money? Residential properties are always a safe bet, but commercial real estate offers considerable opportunities following COVID’s impacts. Another trend to watch is the rise of co-living and co-working spaces, offering a blend of community and convenience that is particularly appealing to younger generations.
The International Factor
Global economic conditions also play a role in shaping the local property market. Trade relations, foreign investment policies, and even geopolitical tensions can have a ripple effect. Being globally aware can not only help you foresee market shifts but also provide a broader perspective when making property-related decisions.
While it’s important to keep an eye on current trends and forecasts, property is a long-term investment. Market conditions will ebb and flow, but a well-timed purchase or sale is only one part of a broader financial strategy. Keeping a long-term perspective can help you navigate short-term hurdles.
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions.