Navigating the Complex Terrain of Australia’s Housing Market in 2024
Based on the insights from two recent articles, Australia’s real estate market is facing a complex set of challenges and dynamics. Michael Janda’s article in ABC News, “Housing Boom and Bust Report tips property price to fall in 2024 as interest rates weigh,” outlines predictions from SQM Research managing director Louis Christopher. Christopher forecasts a mixed outlook for 2024, with property prices in cities like Perth and Brisbane expected to rise, driven by recovery in the Chinese economy and demand for commodities. However, other major cities like Sydney, Melbourne, Canberra, and Hobart may see a correction in dwelling prices due to factors like higher interest rates and a slower economy.
In a contrasting yet related perspective, Emily Power’s piece for Domain, “Owners of empty home ‘out for lunch’ for two years as rental crisis rolls on,” highlights the issue of over one million vacant properties in Australia amidst a rental crisis. The national vacancy rate is at a record low, exacerbating the housing crisis. This phenomenon is partially attributed to properties being land banked or used as holiday homes, as well as other factors like ongoing renovations or owners living overseas.
The contrasting scenarios in these articles underscore the complexity of Australia’s housing market. On one hand, there’s an anticipated downturn in property prices in several major cities, as described by Louis Christopher: “The sharp deterioration of housing affordability…will see a modest to moderate correction in dwelling prices,” he states. On the other hand, the issue of vacant properties, as Power reports, is adding another layer of difficulty, with properties remaining unused while the rental market remains tight.
Angus Moore, PropTrack’s senior economist, provides further context: “Listing numbers in October reflect improved selling conditions, more certainty about interest rates, and the fact that prices have been growing across much of the country this year. These factors have supported vendor confidence.” Meanwhile, Ray White economist Nerida Conisbee points out that “Holiday homes were hot property during the pandemic…This, however, has become a problem now where we are seeing a shortage of rental properties as a result.”
These insights from various experts and analysts paint a picture of a housing market at a crossroads, influenced by global economic trends, domestic policy, and changing homeowner behaviors. As Australia navigates these challenges, the real estate sector remains a critical barometer of the country’s economic health and social well-being.
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