Who's the right agent for you?

Compare, research and shortlist now.

Compare Agents
  • OpenAgent
  • >
  • News
  • >
  • What's in store for Australian property in 2024?

What's in store for Australian property in 2024?

Profile photo of Andy Webb
Written by

Learn more about our editorial guidelines.

As another dramatic year for Australian real estate draws to a close, the predictions begin for what could be a more stable 2024 for our property markets. 

Interest rates and inflation, rapid population growth, exceedingly tight rental markets and a growing diversity between our cities and states are all factors that will dictate where things go over the next 12 months. 

We spoke with buyer's agent and expert commentator Pete Wargent of Allen Wargent about the key themes for the year to come and what he sees unfolding.

Interest rates are expected to hold firm for some time

Since May 2022, when the RBA made its first of 13 decisions to raise the cash rate, Australians have been taken for a wild and challenging economic ride. 

It's been remarkable to see the resilience of Australia's property markets along the journey to 4.35 per cent, but any further hikes could still have a big impact. 

Mr Wargent noted that the latest inflation figures look promising, though, "so that probably keeps interest rates on hold for December, January and February."

From there, he expects rates are likely to continue holding firm "for quite a long time."

There is still a portion of homeowners on fixed rate mortgages waiting to reset to variable rates, meaning further impacts are still to come. 

While Mr Wargent believes that most owner-occupiers will find a way to cope, he said that the trend of investors selling up to mitigate the rising cost of mortgage repayments is something that could continue. 

"If they're not getting capital growth and the cash rate's poor, they're just selling off. People are particularly offloading the worst property in their portfolio."

Overall, he said that "We might start seeing global interest rates falling next year, but in Australia, if you take market pricing at face value, we could just be on hold for a long time potentially."

Population growth should continue to stoke demand, but listings may rise 

Australia's population has been growing at a record pace over the past year, driving up demand for property at a time when supply is scarce. 

"We're right in the eye of the storm at the moment," Mr Wargent explained. 

"The latest ABS estimates say one person is being added to the population every 47 seconds. If you take that at face value, that's 675,000 people per annum. There's no way an economy can accommodate that."

What that has done is drive property prices back towards all-time highs throughout 2023 despite the high interest rate environment. 

Mr Wargent pointed out that it's important to note the sudden influx is partly to do with the return of international students who were locked out of the country during the Covid border closures. 

"When the student figures are in the system, we'll probably see population growth fall back over the next year," he said. 

Demand broadly outstripped supply in 2023 as listings remained low in many parts of the country. The new year finally could see a more widespread return of sellers. 

"One of the reasons listings may rise is more confidence," Mr Wargent said. 

"The market's been more robust. There's more certainty about where interest rates will peak. If you get a few months with rates on hold, people get a bit more confident about making decisions.

"I think listings will rise next year but they might not get back to the five-year average because we've still got population growth outstripping supply. That's my gut feeling."

Some markets are primed to outperform

The latter part of 2023 has delivered greater fragmentation across different cities, states and regions, and that's something that could be extended across the new year. 

Looking to the capitals, Mr Wargent suggested Perth and Brisbane could be best positioned to come out on top in 2024. 

"Perth has had a dozen years with nothing really happening. But now the market is so tight and population growth is so high, I think Perth will outperform," he said. 

He added that "Brisbane, despite everything, is very competitive. I think we'll still see price growth in Brisbane."

Melbourne, which has "softened quite considerably," may not be so lucky in 2024, and Sydney "seems patchy — some parts of the market are doing well and others are lagging."

Looking regionally, Mr Wargent's pick for the new year is Newcastle due to its "really strong fundamentals," but again things are looking considerably more diverse around the country. 

Given that buyers are facing reduced borrowing capacities of up to 30 per cent, or in some cases more, more affordable pockets of many markets could be the ones to enjoy the greatest competition. 

"I think the gap between units and houses will continue to shrink," he said, adding that the struggle for developers to remain solvent and deliver new builds is likely to keep driving apartment prices higher. 

"The price differential is closing a bit because of build costs, and house prices in a lot of areas have overshot and might start to come down."

2024: a return to 'normal'?

Australia's property rollercoaster has been a constant source of surprise since the beginning of the pandemic. As Mr Wargent put it, "It's been like a whipsaw the last few years. Everything has been so volatile and hard to predict."

But, he said cautiously, we may be looking at "a more balanced, stable market" in 2024 as things begin to settle. 

"Interest rates are higher than they were but at least people can see where they're going to be. People can start to make decisions with more confidence, both buying and selling."

While mortgage stress will continue to be an issue around the country, Mr Wargent believes it's more likely that retail sales and consumer spending will be the casualties before the property market takes a significant hit. 

Many potential sellers are afraid being able to find a new home to buy if they go to market, an issue that has been at the heart of the listings shortage since spring 2022. 

If rising listings beget rising listings, there may be a more typical free-flowing market up ahead.