Market Will Strengthen In 2024

Last week we released the 2024 McGrath Report, which reveals four key trends across the East Coast as well as what’s happening in the major metro property markets of NSW, Queensland, Victoria, and Tasmania.

Affordability continues to be an issue for most Australian buyers and homeowners. The cost of living crisis is making home finances difficult to manage, but as inflation falls and interest rates stabilise, we expect an increase in market activity in 2024 and beyond.

In my view, property investment remains the most reliable path to wealth creation and a comfortable retirement in Australia today. In terms of home ownership, now is the time to ‘right size’ your living situation.

With rates this high, there may be temptation to store money in savings accounts with a 4% to 5% no-risk return that is higher than rental yields in many instances. However, this is a short-sighted approach to long-term wealth accumulation. Capital growth is the superior consideration for investors wanting a financially secure retirement in 10, 20 or 30 years’ time.

Many investors today are looking further afield for opportunities beyond where they live. The benefits of ‘remote investing’ include the potential for better capital growth in the regions, as well as the higher rental yields that come with more affordable properties.

One of the most fascinating elements of the Australian market is that 67% of us choose to live in one of just eight capital cities, despite our nation being a land of sweeping plains.

But the pandemic encouraged more people to move to the regions, which has led to very good price growth in many areas.

Regional living is not just an option for those who work from home, either. Many of these economies are expanding, creating more local employment at a faster pace than in the cities right now.

The current global uncertainty reminds me a lot of the immediate period after the GFC.

Most people had a very dark outlook on the world economy back then. But I was advising clients to buy property as soon as they could, and those who did were rewarded in less than 12 months.

It’s time to be that brave again, in preparation for the next major market upswing. You probably don’t see it coming now, but I know after 40 years in this business that it’s just over the horizon.

Our theme for the McGrath Report 2024 is ‘Prepare for Take-off’. If you can navigate this volatile economic period, I’m confident you’ll see your home’s value start to rise, and probably sooner than you think.

To review my top suburb picks for 2024 in NSW, Queensland, Victoria, and Tasmania, view the McGrath Report.