Issue 27 | Thursday 11 January 2024 | Deciphering the Real Estate Landscape in 2024: Insights, Challenges, and The Event 2024
Hello, this is Andrew Bell, and I want to extend my heartfelt wishes for a very Happy New Year and all the best in 2024.
As we reflect on our summer break, it’s evident that wild weather occurrences, especially during the famous storm season, have impacted regions from Cairns in the North to Melbourne in the South, affecting the Eastern seaboard more than the West. However, one silver lining is the reduction in fire risk for many areas, thanks to these weather patterns. Our thoughts go out to those affected, and we extend our gratitude to the remarkable first responders who consistently come to the rescue.
Recently, I’ve been frequently asked about the property forecast for the upcoming year. Drawing on nearly 40 years of experience in the industry and my role with the Real Estate Institute of Australia, I base my response on two significant factors: interest rates and the supply-demand equation.
Despite a rapid rise in interest rates from the record lows of 2022, home values nationwide surged by 8.1% in 2023, defying many forecasts. Research indicates that while savings have been utilised to meet loan repayments, rising incomes and significant equity in homes have discouraged banks from forcing sales, opting instead to work with borrowers.
Looking ahead, economists predict a potential rise in interest rates in 2024, although a consensus suggests a decline in the second half of the year. July will bring tax cuts, providing relief equivalent to 2-3 interest rate drops, according to economists.
While interest rates play a pivotal role in the real estate market, the supply-demand equation emerges as another crucial factor. Record immigration in the past year, contributing to a population growth of over half a million, has heightened demand. However, home building has slowed to its lowest pace in over a decade due to increased costs for materials, land, and finance, leading to an expected housing shortfall of at least 175,000 homes by 2027.
Despite government goals to build 1.2 million new homes over the next five years, current conditions are challenging for stimulating building. I believe that supply and demand pressures will outweigh the effects of higher interest rates, affecting property values. A breather is essential, especially considering the difficulty in saving for deposits amid rising interest rates, rents, and the cost of living.
As we navigate these dynamics, my team and I are excited to present The Event 2024, featuring 127 properties in our largest annual in-room auctions. Additionally, the Gold Coast Home and Living Expo provides an excellent opportunity for buyers to engage with professionals associated with property transactions. Save the date for our auction at Royal Pines on the 28th of January, and explore the array of properties here.
For any inquiries about The Event, feel free to contact our hotline on +61 (7) 5538 1555.
Wishing you, once again, a very Happy New Year, and may 2024 bring a focus on the positive aspects of our lives.
Andrew Bell, OAM
The Ray White Surfers Paradise Group