The December quarter saw the property market, and many factors contributing to it, reflect a level of stability that boosted the confidence of both buyers and sellers alike.
Improved selling conditions and more certainty around interest rates supported an increase in activity in the last quarter of 2023, and although December experienced its typical end of year slow down, listing numbers continued to be buoyant with an 18.5% increase when compared to those recorded at the same time in 2022.
The upsurge of properties brought to market in the last quarter of 2023 provided buyers with greater choice; this was reflected by a minor downturn of 1.3% in the median price of homes in Melbourne across this period. For the third quarter running, the change to unit and apartment medians was more subtle than those seen with houses, again bringing factors such as affordability, borrowing capacity, and buyer caution to the forefront.
So, with 2023 now behind us, what can we expect in 2024?
Michael Yardney from propertyupdate.com.au recently reported predictions from the four big banks who have forecast Melbourne’s 2024 property prices to increase between 3% and 5.5%, with NAB the most optimistic. These sentiments are echoed by many leading economists who are also confident interest rates will remain stable before eventually starting to decline again.
AMP chief economist Shane Oliver is one of these, expecting the RBA to start lowering interest rates in June, with 3 cuts by 2024’ end. In line with initiatives including the federal government’s shared equity ‘Help to Buy’ scheme, this could stimulate stronger price growth again.
These factors, along with more policies geared toward transitioning tenants to buyers could also assist in easing pressure on what is still being described by industry experts, including Domain’s Dr Nicola Powell, as “a very tight rental market”. This, along with the prediction by Domain that rental price growth will most likely slow towards the latter half of the year, would be welcome news to tenants.
If you’d like to discuss your 2024 property goals, call your local Noel Jones office or contact us via noeljones.com.au and we will be happy to assist.