As the new year approaches, industry experts are forecasting the trends that will shape Sydney’s real estate landscape in 2024. Mark Foy, founder and principal of McGrath Surry Hills, with over two decades of expertise, offers insights into the future of Australia’s most competitive property market.
Amidst intense discussions over recent weeks, Tim Reardon from the Housing Industry Association has forecasted a downturn in new home starts, while SQM Research expects a 4 percent dip in dwelling prices. PRD Real Estate suggests it’s a prime time for Sydney’s house hunters. Nonetheless, Foy’s comprehensive predictions provide a nuanced view, highlighting five key shifts that stakeholders should anticipate.
“Sydney’s 2024 property market will witness an intriguing interplay between rising interest rates, escalating rental prices, and varying performances across property value segments,” Mr Foy stated, adding that “the synergy of these elements will define market dynamics, influencing buyer behaviour and investment decisions.”
Here is a deeper dive into the trends Mark Foy predicts for 2024:
- Interest rate movement: Interest rates are on a steady climb, and this trend is set to continue through the first half of the year, exerting additional pressure on buyers and renters alike. These adjustments are critical as they directly impact the purchasing capacity and decisions of potential buyers.
- Rental market surge: Renters beware – Sydney’s rents are on the rise, with a significant 10-15 percent hike projected for 2024. This uptick is expected to further challenge rental affordability, having a tangible impact on both tenant and landlord decisions.
- Stagnation in lower-priced properties: Properties below the $1.2 million mark, which generally rely on finance, may experience stagnancy. Foy suggests that this mid-range segment of Sydney’s housing market might brace for a period of little to no change over the next year.
- Resilience of high-value properties: Contrasting the middle sector, properties valued above $2.5 million, particularly those on the city’s fringe, are anticipated to maintain their positive trajectory. This high-end market, offering a variety of property types such as spacious apartments for downsizers, is expected to carry its momentum through 2024.
- Stock levels and mortgage pressure: Sydney’s property market is predicted to continue as a low-stock environment into 2024. While mortgage pressures might compel some homeowners to sell, Foy argues that the anticipated rise in stock levels will be minimal, maintaining a “delicate balance” between supply and demand.
As the trends unfold, it is clear that Sydney’s property market in 2024 will be characterised by a blend of rising interest rates, surging rents, and selective momentum within various valuation segments, as delineated by Mr Foy’s expert predictions. Whether you’re a buyer, seller, or renter, these trends are worth watching closely as they will undoubtedly influence the real estate decisions across the Harbour City.