As we step into 2024, the Sydney property market is on the cusp of exciting changes, presenting opportunities for those looking to buy, sell, or invest.
Here are our predictions for the Sydney market in 2024 – they might just give you the edge you need.
1. A 0.25 interest rate reduction in late March
The Reserve Bank of Australia (RBA) aims to keep consumer price inflation between 2% and 3% on average, over time. Currently, the annual consumer price index for the September quarter is at 5.4%, with a monthly indicator of 4.3%. Though not within the RBA’s target just yet, the trend is positive, showing a decrease from the December 2022 peak of 7.8%.
Add to this the anticipated decline in Christmas retail figures, influenced by shoppers getting behind Black Friday sales, and you just might have an interest rate reduction on the cards when the RBA meets in late March.
We’re placing our bets on a 0.25 reduction, but keep in mind that after this drop, we might have to wait another 6-12 months before the next one.
2. Rental price growth eases up
The past year has seen a dramatic increase in rental prices in Sydney, with a 13.6% rise in house rents and 17.2% increase in unit rents, seeing the city overtake Canberra as the most expensive capital city to rent a house, according to the latest PropTrack data.
While rents will still climb, we don’t expect them to continue to skyrocket in 2024. Rather, it will be more of a gentle incline as we move through 2024.
3. More landlords entering the market
Last year, we saw a dip in available rental properties, with some landlords selling due to financial stress, just as rising immigration boosted demand. The lowered interest rates expected later in the year could tempt more people into property investment, thereby expanding the rental property pool and keeping rising rents in check.
4. Sale prices to keep climbing
In 2023, we saw Sydney home prices rise by a solid 7.72%. In the last quarter, though, this slowed with December bringing a 0.08% dip. Does this mean a market crash is coming? Probably not. We’re anticipating 2024 will bring a steady 5-6% increase in Sydney sale prices, fuelled by limited properties for sale and more landlords entering the market.
5. Newbuilds make a comeback
It’s no secret that building a new home has been a pricey affair lately, thanks to supply chain disruptions, soaring construction costs, tightened regulations and increased labour costs – to name a few. However, a decrease in building approvals indicates that home builders will start construction on fewer new houses in 2024 than at any time in the last decade. This scenario may lead to more competitive pricing from builders, attracting homeowners and investors back to newbuilds in the next 6-12 months.
While you’re out there navigating the real estate market, keep these predictions in your back pocket—they might just come in handy. Real success comes from expert guidance and our team is ready to deliver personalised advice and support to all our clients and customers. Reach out using the contact details below and let’s make 2024 a landmark year in your real estate journey!
The information referred to in this article was obtained from publicly accessible sources, including RBA, ABS, HIA, REB and Mozo. The information provided in this blog post is for general guidance only and should not be taken as personal advice. We do not accept any liability for any errors or omissions.
Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au
Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
