Australian Housing Market Insights in 2024

The Australian housing market has seen a number of macroeconomic factors lead to its rises and falls over the past year. From spiking interest rates to booming inflation and limited purchasing power, many Australians are starting to believe the dream of owning a home is out of reach. But what is in store for 2024? In this article, G.J. Gardner Homes dive into the housing market trends we predict to see in this new year.

Modest house price growth

Over the past year property prices have continued to increase. It is predicted in 2024 we will continue to see moderate growth in house and unit prices despite high interest rates and diminished borrowing capacities.

The stage 3 tax cuts from July 1st are expected to stimulate demand amongst high-income earners to support price growth throughout the rest of the year. This initiative by the Australian Taxation Office (ATO) aims to help Australians with the high cost of living and will reduce tax paid by individuals earning more than $120,000 per annum.

On top of this, wage growth continues to rise and continues to be growing at the fastest rate in over a decade. This is set to help Australians offset larger mortgages, particularly as fixed-rate mortgages are set to expire from 2% and reset at 6%.

Interest rates staying steady

Over the past year, interest rates have become a dreaded word amongst borrowers, with continued increases bolstering mortgage repayments and lenders offering less to potential buyers. At the end of 2023, interest rates made another jump to 4.5% to respond to inflation, a 12-year peak in Australia, which significantly reduced borrowing capacity.

However, economists predict the stabilisation of the interest rate due to weakening economic conditions and subsequent cuts across 2024. A lower interest rate will increase the ability of Australian buyers to purchase a home and revitalise the housing market.

Setting up in suburbia

Due to the rise of housing prices particularly in urban areas, many are choosing to move out into suburban areas as well as regional and rural communities. As a far more affordable option, it is expected that this ‘urban spread’ and the gentrification of once-overlooked suburbs will occur throughout the year. With less density in these areas, house and land packages have become a popular option for buyers choosing to move out of urban areas and embrace the suburban lifestyle.

The upcoming scheme by the Federal Government ‘Help To Buy’ will also assist a portion of Australians to purchase a property with only a 2% house deposit. In this scheme, the government will share equity of the home up to 30% for an existing home and 40% for a new home. This aims to reduce the barrier to entry for homeownership and allow Australians to enter the property market sooner.

On top of this, the First Home Buyers Scheme is also available to those looking to buy or build their first home. Due to the limited availability of new homes in urban areas, the house and land packages further out of major cities are an attractive offer for first-home buyers.

Short of space in major cities

The limited supply of land and new homes in major cities across Australia has not only led to the ‘urban spread’ of homebuyers into the surrounding suburbs and rural areas. It has also changed homebuying behaviour. To tackle density issues in urban areas, homebuyers are opting for a more budget-friendly solution of townhouses and dual occupancy homes.  

Rental market shortages increase property demand

Over the past year, a real rental crisis has begun across Australia with an oversupply of applicants and a shortage of available properties to rent. This has subsequently driven up rental prices and places those in a position to invest in a favourable spot. As an investor, the current market is in a good position to get a good return and rental yield.

What are Australians looking for in a home?

In 2024, according to a Realestate.com.au study, many Australians are looking to purchase new homes with a focus on quality builds and features. The most popular property preference is for a 3-bedroom home with 2 bathrooms and 2 car spaces.

Indoor spaces are increasingly important with many potential buyers looking for natural light, open-plan living spaces and entertainment areas to host friends and family. Other primary considerations for purchasing a home include storage space and privacy.

Get in contact today

Are you looking to build a new home this year? G.J. Gardner Homes has decades of experience in home design and building. Our expert team is here to help you on your home-building journey. Enquire online today or contact our team to learn more.