As the year 2024 unfolds, the property market is experiencing a remarkable resurgence in investor engagement, even amid challenges like high interest rates and living costs. Here are some reasons why we think 2024 is shaping up as a pivotal year for property acquisitions:
1. LOW STOCK AND HIGH DEMAND FOR RENTALS
At the end of 2023, the national rental vacancy rate hit a new record low. Low supply and strong demand resulted in increased rental returns for landlords, with national rents across all regions rising by 9.9%, and capital cities experiencing an even higher increase at 14.2%. With rents growing fast and a consistent shortage of rental properties, more investors are jumping back into the market in 2024.
2. INTEREST RATES & PROPERTY VALUES
History shows a connection between the top of the rate cycle and increased property values. Many in the industry are now predicting that we will see property prices continue to rise as interest rates begin to fall in 2024, making now a great time to get involved. Daniel Thalji, Head of Wealth Strategy at Future Assist, highlights the potential impact, stating, “When interest rates start to drop, people’s borrowing capacity will improve, meaning more competition and price rises.”
3. TIME IN THE MARKET BEATS TIMING THE MARKET
“I’ve always believed in ‘time in the market, as opposed to timing the market,” emphasises Daniel. Despite interest rates increasing over the last 2 years, the chance to start building your property portfolio is a compelling reason to consider investing in 2024. You may spend more on interest, but the potential for higher property values and equity growth increases the longer you hold on to property.
4. REFINANCE WHEN RATES FALL
Real estate experts believe the current high interest rates are temporary, with signs pointing towards a downward trend by the end of 2024. As the Federal Reserve takes action to address inflation, the expectation in the market is that interest rates will decrease. While interest rates may be lower later in the year, getting into the market early positions investors to take advantage of favourable market conditions and potentially refinance or renegotiate their loans when rates drop.
5. REGIONAL OPPORTUNITIES
Differences in property market performance across regions offer strategic options for investors. Some areas of QLD, SA, TAS and WA are predicted to have better-performing property prices, making them more attractive options for investors. As an example, forecasts suggest that Brisbane is anticipated to outperform Sydney in terms of property value growth in 2024. Also, the lower property prices in Brisbane, make it a more accessible option for potential investors.
In conclusion, the convergence of these factors positions 2024 as an exceptional year for property investment. Whether you’re a first-time investor or seeking to expand your existing portfolio, the combination of high rental demand, anticipated interest rate reductions, and the current market conditions, offer plenty of opportunities.
For those eager to explore these opportunities our team of wealth and property experts is here to assist you. Reach out to us today to get started!
The information contained in this webpage is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided.
