Australian Housing Market 2024

The Australian housing market is a dynamic and ever-evolving space, influenced by a myriad of factors such as interest rates, economic conditions, government policies, and housing supply. In this blog, we will explore the current state of the Australian housing market, the importance of building and pest reports in property transactions, and the implications of interest rates, housing affordability, and the lack of new homes being built on the market.

Housing Affordability and Lack of New Homes:

Housing affordability remains a significant concern for many Australians, particularly first-time buyers and low to middle-income earners. The combination of rising property prices, stagnant wage growth, and limited housing supply has made it challenging for many people to enter the housing market. The lack of new homes being built exacerbates this issue, leading to increased competition for existing properties and further driving up prices.

The forecasts incorporate several technical assumptions as of 2024:

The cash rate is assumed to move broadly in line with expectations derived from surveys of professional economists and financial market pricing. Using this methodology, the cash rate remains around its current level of 4.35 per cent until mid-2024 before declining to around 3¼ per cent by the middle of 2026. This cash rate path is a little lower than at the November Statement.
The exchange rate is assumed to be unchanged at its current level, which is 1.7 per cent higher than the November forecasts on a trade-weighted basis.
Crude oil prices are assumed to be broadly unchanged around their current levels for the rest of the forecast period, which is around 4 per cent lower than at the November Statement.
The assumed level of the population has been revised slightly higher. Recent net overseas migration has been stronger than expected while migration policy changes are expected to provide some offset over the forecast period; year-ended population growth is assumed to have peaked in the September quarter at around 2½ per cent, after which it is expected to decline back to its pre-pandemic average of around 1½ per cent.

The Importance of Building and Pest Reports in this Context:

Against the backdrop of a competitive housing market, obtaining a building and pest report before purchasing a property becomes even more critical. These reports provide valuable information about the condition of the property, helping buyers make informed decisions and potentially saving them from costly repairs or future issues. In a market where housing affordability is a pressing concern and new homes are in short supply, ensuring the structural integrity and pest-free status of a property through building and pest reports is paramount.

The Australian housing market is a complex and multifaceted environment that requires careful consideration and strategic planning from prospective buyers. As interest rates potentially lowering in the future and housing affordability remains a challenge, the need for due diligence, including obtaining building and pest reports, becomes even more crucial. By arming themselves with the necessary information and insights, buyers can navigate the market with confidence and make informed decisions that align with their financial goals and aspirations for homeownership.