Australian Property Market 2024: Navigating the Ups and Downs

Revealed: First Home Buyer Schemes That Beat the Market!

G'day, mates!As we dive into the latest yarn from the Australian property market for the week ending 23 February '24, it's clear we're in for a bit of a rollercoaster ride.

With land prices reaching sky-high levels and the rental market tighter than a budgie's smuggle, navigating the property landscape might seem daunting.

But fear not!

Whether you're a first-home buyer, a hopeful investor, or just keen to stay in the loop, we've got the freshest insights and tips to help you make sense of it all.

So, grab a cuppa, settle in, and let's unpack what's happening in the Aussie property market together.

Land Prices Hitting New Heights

In the ever-evolving landscape of Australian real estate, the latest figures have certainly caught the eye of industry watchers and hopeful homeowners alike. As of the September quarter of 2023, the national median price of a residential block of land in Australia has soared to an unprecedented $340,000. This milestone, as reported by the Housing Industry Association (HIA) in collaboration with CoreLogic, underscores a significant trend in the property market, driven by a notable shortage of lots.

Tom Devitt, a senior economist at HIA, points out that this surge in land prices, a direct consequence of the pandemic's impact, has been exacerbated by a bottleneck in delivering the necessary infrastructure. Moreover, developer contribution charges have further tightened the screws on home building, presenting a paradox to the Australian Government’s objectives for housing affordability and availability.

A Glimmer of Hope for First-Home Buyers

Despite these challenges, the horizon isn't entirely bleak for first-home buyers (FHBs). The Federal Government's Home Guarantee Scheme has emerged as a beacon of hope, offering a pathway to homeownership with as little as a 5% deposit. Anne Flaherty, an economist at PropTrack, highlights several locales where the dream of owning a home remains within reach:

• In Victoria, places like Thomastown and Mickleham
• Queensland's Morayfield and Springfield Lakes
• Hamilton and Mayfield in New South Wales

These areas represent the best picks for FHBs, where the cost of a mortgage could indeed be more appealing than renting.

The Unsung Heroes: Grandparents

In an interesting twist, the traditional bank of mum and dad is now being complemented by the generosity of grandparents. Research from McCrindle shows a growing trend of grandparents providing financial support or even free housing to help their grandchildren step onto the property ladder. This emotional and financial investment by grandparents is not only heartwarming but indicative of the broader family dynamics at play in Australia's property market.

The Rise of Build-to-Rent

The build-to-rent (BTR)sector is on the cusp of a significant boom, with projections suggesting a potential tripling of units by 2026. This sector, which has seen more than $5 billion in capital raised last year, is expected to offer a new lease on life for the Australian rental market. Robert Papaleo, Colliers' national director of residential capital markets, emphasizes the critical need for institutional investment to support this burgeoning sector, drawing parallels to the early days of the UK's BTR market.

Rental Market Tightens

As the academic year commences, the demand from university students is set to push rental prices even higher. With the national vacancy rate at a mere 1.1%, landlords are poised to see an increase in rental income. This scenario, outlined by Louis Christopher of SQM Research, highlights the pressing need for potential renters to stay informed and proactive in their search for accommodation.

In wrapping up, the Australian property market in 2024 presents a mixed bag of challenges and opportunities. From the steep climb in land prices to the promising avenues for first-home buyers and the pivotal role of grandparents, the narrative is rich and complex. The burgeoning BTR sector and the tightening rental market further add layers to this intricate story.

As we navigate these waters, it's crucial to stay informed and agile. Whether you're a first-time buyer, a renter, or an investor, understanding these trends is key to making empowered decisions in the property market.

Rupali Rastogi, your Independent Buyer’s Agent, here to guide you through the maze of property investing. If you're keen to explore how these market dynamics affect your property journey, I'm here to help. Let's have a one-on-one conversation about your personal circumstances and carve out a path to property wealth that's tailored just for you.

Ready to take the next step? Book a time with me at https://getrare.com.au/ready or join our educational workshops to deepen your understanding of property investing at https://getrare.com.au/workshop. Your journey to property success starts here.

Disclaimer: While the content we've shared is chock-full of information, remember it's general in nature. Your financial journey is unique, so it’s crucial to have a yarn with your own adviser before making any moves. This isn't personal advice, just a bit of friendly wisdom to ponder. Always tailor your decisions to your individual situation for the best outcomes.