A Recap of the 2024 Year in Property – And Our 2024 Prediction Hits, Misses, Lessons and Surprises (Ep. 294)

Previously known as “The Property Planner, Buyer and Professor”

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Show notes – 2024 Property Predictions

In this engaging and jam-packed episode of The Property Trio Podcast, the team dives deep into the property market, sharing their 2024 property predictions. While this is our longest episode to date, we promise it’s filled with valuable insights, predictions, and plenty of laughs.

What Will the Market Do in 2024?

  • Dave’s Bold Prediction: National value growth will range between 2-7%, but Melbourne and Sydney could weigh down the national average.
    • Early 2024 offers buying opportunities in Melbourne and Sydney, though they might hold back overall growth.
    • Rental growth is expected to outstrip capital growth.
  • The group analyzed how growth deceleration started late in 2023, noting its implications for the upcoming year.

Top Performing Cities

  • Dave: Backed Perth as the standout city, followed by Brisbane and Darwin as a “wild card.” Perth ended up leading with 21% growth, while Adelaide and Brisbane followed.
  • Cate: Chose Adelaide, citing its job creation and evolving cool factor, which led to a strong 14% growth.
  • The Trio agreed that Melbourne’s struggles with growth drivers and state debt made it a non-contender.

Regional Markets

The Trio reflected on their regional predictions:

  • They admitted to underestimating the strength of regional markets in WA, South Australia, and Queensland, which continued their momentum.
  • Discussions centered on affordability-driven migration and investor activity in smaller markets.

Investor Activity

  • A 30% increase in investor activity surprised the Trio.
    • Cate linked the rise to stabilizing interest rates and affordability in cities like Perth, Adelaide, and Brisbane.
  • Dave noted that Perth’s land tax repeal and Victoria’s investor exodus influenced activity.

Government Intervention

  • Dave’s Insights: Predicted tax changes for high-balance super accounts and incentives for the build-to-rent sector. Both predictions materialized, with legislated changes set to take effect in 2025.
  • Cate: Forecasted a broader array of shared equity initiatives, aligning with new legislative actions aimed at improving housing access.
  • Mike: Emphasized concerns over rent cap discussions, noting the potential for harm despite the unlikelihood of their implementation.

Construction and Developer Challenges

  • Mike highlighted builder liquidations and the ongoing struggles with cost inflation in construction materials.
  • The Trio discussed the need for innovation in construction through modular housing and off-site assembly, alongside government incentives to boost supply.

Interest Rates

  • Dave: Predicted one more rate rise but no reductions for 2024.
  • Cate: Believed rates would stay static, which aligned with the year’s trends.
  • Mike: Speculated a cut by August but conceded the bold prediction didn’t pan out.

Rents and Vacancy Rates

  • Dave won this category, accurately predicting that vacancy rates would stay low, with a slight uptick and rental growth outpacing capital growth.
  • Perth and Sydney rents demonstrated moderate softening, while Melbourne saw more significant challenges.

Sales Volumes and Listings

  • Cate observed higher sales volumes in Q1, while Dave pointed out rising listing numbers throughout the year, tied to economic pressures.

Market Risks

  • Dave: Flagged geopolitical risks, from Donald Trump’s potential return to global conflicts.
  • Cate: Raised concerns about natural disasters affecting insurance costs and investor choices.
  • Mike: Cited political intervention as the biggest risk, using Melbourne’s land tax policies as an example of missteps.

Inflation and 2024 Outlook

  • Dave nailed his inflation prediction, anticipating a return to the target band (2-3%) by late 2024.

 

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