Trends in Australian Real Estate: What to Expect in 2024

The Australian real estate market is constantly evolving, influenced by economic conditions, government policies, and buyer preferences. As we approach 2024, several key trends will shape the property market, affecting buyers, investors, and renters alike.

This blog explores the major trends expected to impact Australian real estate in 2024, helping you stay informed and prepared for the changing landscape.

1. Stabilizing Interest Rates

After a period of rising interest rates aimed at controlling inflation, 2024 is expected to bring more stability. The Reserve Bank of Australia (RBA) increased rates multiple times in 2023, slowing the housing market by making mortgages more expensive. In 2024, interest rates are predicted to stabilize, providing more certainty for buyers and investors.

What This Means:

• Stabilized rates could encourage more first-home buyers to enter the market, knowing their mortgage repayments will be more predictable.
• Property investors may regain confidence, especially as rental yields are expected to grow in high-demand areas.

2. Focus on Affordable Housing

Housing affordability remains a critical issue, especially in major cities like Sydney and Melbourne. In 2024, both the government and property developers are expected to continue efforts to address this issue.

Government Initiatives:

• Programs like the First Home Loan Deposit Scheme and First Home Super Saver Scheme will help first-home buyers save for deposits and enter the market with lower upfront costs.
• State governments may expand stamp duty exemptions, easing the financial burden for first-time buyers.

Developers’ Role:

• More affordable housing developments will emerge in outer suburbs and regional areas, catering to young families and first-home buyers priced out of inner-city areas.

3. Growth in Regional Areas

The trend of moving to regional areas, which accelerated during the pandemic, will continue in 2024. Many Australians are seeking more affordable homes and a better quality of life away from crowded cities. Improved infrastructure and the rise of remote work are making regional areas more attractive.

Key Growth Areas:

• Coastal regions like Queensland’s Sunshine Coast and Victoria’s Geelong will continue to attract buyers.
• Smaller regional towns with strong local economies and good schools will also see growth, especially among families.

4. Demand for Sustainable Housing

Sustainability is becoming increasingly important for both homebuyers and developers. As awareness of climate change grows and energy costs rise, demand for eco-friendly homes is expected to increase in 2024.

What to Expect:

• Developers will incorporate more sustainable features like solar panels, rainwater tanks, and energy-efficient designs to meet the demand for greener homes.
• Homes with high energy efficiency ratings will become more attractive, offering buyers long-term savings on energy bills.

5. Pressure on the Rental Market

Australia’s rental market has been under strain, with rising demand and limited supply pushing rents higher. This trend is expected to continue in 2024, particularly in major cities like Sydney, Melbourne, and Brisbane.

Factors Contributing to Pressure:

• High property prices are keeping many potential buyers in the rental market for longer, increasing rental demand.
• The return of international students and skilled migrants will further boost rental demand.

For Investors:

• The strong demand for rental properties presents opportunities for investors, especially in areas with increasing rental yields. However, keep an eye on potential government regulations aimed at protecting tenants from excessive rent hikes.

6. Urban Densification and Mixed-Use Developments

With ongoing population growth in Australia’s major cities, the focus on urban densification will continue. High-density living through apartments and mixed-use developments is becoming more common in cities like Sydney and Melbourne.

What This Means for Buyers:

• Apartments and townhouses in central locations will remain popular, especially for young professionals who prioritize proximity to work and amenities.
• Mixed-use developments, which combine residential, commercial, and retail spaces, will offer convenient living environments where residents can access everything they need within walking distance.

7. The Role of Technology in Real Estate

Technology will continue to play a major role in transforming the real estate market in 2024, making the process of buying, selling, and managing properties more efficient.

Key Innovations:

• PropTech solutions, such as virtual property tours, online auctions, and blockchain-based transactions, will simplify the buying and selling process.
• Smart home technology, like systems for controlling lighting, temperature, and security remotely, will become more common in new developments.

8. Return on Foreign Investment

Foreign investors, who had reduced activity during the pandemic, are expected to return to the Australian property market in 2024. Australia remains an attractive destination for overseas buyers due to its stable economy and favourable investment conditions.

Impact on the Market:

• Increased foreign investment could drive competition for high-end properties, particularly in Sydney and Melbourne.
• Foreign buyers may also boost demand in sectors like luxury real estate and commercial properties.

Conclusion

In 2024, the Australian real estate market will be shaped by several key trends, including stabilizing interest rates, growing demand for affordable and sustainable housing, and continued growth in regional areas. Whether you’re a buyer, investor, or renter, staying informed about these trends will help you make smarter decisions in the coming year.