Have you considered investing in property in 2024?
Well, take this as your sign – maybe it’s time!
When it comes to property investing, it can be easy to place all of the decision making power on the broader population. This means that we can be easily influenced by market trends, good and bad, without actually considering our individual goals and circumstances. Even when those circumstances may well have us in a sound position to PURCHASE property.
This is certainly something that we’ve seen come to the fore over the last 18 months. As interest rates and inflation went up, we saw the population in general lose their confidence when it came to property, leading to a slight slump in the market. Now, since a slow in interest rate hikes and quelling of inflation, confidence is returning, leading to more demand in the market, and price increases across Australia over the past few months.
People in general weren’t necessarily doing their best to make the most of their position.
At the same time, it’s done one VERY important thing for a unique group of people – the savvy investors…
The ones that aren’t impacted by the broader noise – because they understand that property investment is about long term equity, rather than whatever happens (good or not so good) in the short term.
So plainly, rather than figuring out when is the perfect time to invest, the answer is that there’s no time like the present.
But, despite being immune to the media’s noise, there are a couple of things you should know – and they make a pretty compelling case for investing in property in 2024.
Here they are:
1. Supply and Demand
At the end of the day, the whole property market stems upon the economic principles of supply and demand.
These two factors influence every move in the markets, on a global scale, all the way down to you purchasing your investment property, or buying a tin of tomatoes.
In simple terms, if supply is high and demand is low, prices go DOWN, and conversely, if demand is high and supply is low, prices go UP.
You may remember the uproar about iceberg lettuce prices a couple of years back – supply for lettuces went WAY down, and the demand stayed the same, meaning prices soared. Looking at the market with a long term frame, things are looking very similar…
Low supply due to increased costs and lagging property approval numbers, combined with huge demand highlights that growth is well and truly brewing in the property market.
In fact, the number of approvals for new builds across Australia was at a 10 year low in the last financial year – at 164,000, highlighting that the supply of new homes just isn’t there to match demand.
As a prospective investor, that’s something you can help with…
2. Migration
When it comes to migration, it goes without saying – there’s bound to be more demand for property.
As a result of the current world we live in, we have seen some incredibly interesting migration here in Australia, not just on a national level, but on a state by state basis too.
The first factor in this migration equation is one that has come up quite frequently in the news overseas migration. With a shortage of skilled workers and international students in Australia, people are coming from far and wide to experience the country and settle down.
This has a snowball effect on the market in general, because at the end of the day, everyone needs somewhere to live. So even though you may not be purchasing an inner-city apartment as student housing, it still has a pretty significant impact on property market saturation.
The other type of migration to look at – of the state-to-state variety – is equally important. Simply put, this is due to uneven rates of migration, placing even MORE pressure on the demand for certain towns, cities and regions.
An excellent example of this targeted growth occurred throughout 2021, when South-East QLD saw a net increase of around 1100 people PER WEEK. This huge influx of people led to major demand increases, and in turn major price increases. Ultimately, as a result of this, the Gold Coast recorded a 26.7% jump in house prices throughout 2021.
Now, we might not be seeing the same magnitude of interstate movement as we saw in 2021, but it’s an important thing to consider as we keep moving throughout 2024 and beyond – as people want lifestyle changes and some warmer weather. Population can certainly be a game changer.
3. Rental Market Strain
The current supply and demand landscape of the Aussie property market does a good job of highlighting the rental market as a whole.
With low supply of new builds, as a result of labour shortages, increased material prices and supply chain issues, it has caused all kinds of demand issues for rental properties.
Ultimately, this has led to incredibly low (the lowest on record!) vacancy rates, as well as large increases in rental yield.
According to PropTrack, the national Rental Vacancy rate as of Jan 2024 is 1.07% – a LONG way below the target range of 2-3%. Not to mention that the PropTrack stats indicate that rental affordability is the worst on record.
As you may have seen or experienced, resulting from these factors, the Australian rental market is incredibly tight. Even pretty average properties are frequently receiving upwards of 50-100 applications – and people are often waiting months to get a place.
For us, this highlights two things:
- Providing SUPPLY of quality property to the market will help renters in the long term.
- Financial literacy, and making the most of your position is KEY. Whether it’s growing your existing portfolio, or rentvesting, your circumstances may never be as enticing to enter the market.
As they say, the best time to invest was yesterday.
If you have equity for a deposit, income to service your loan, and a cash buffer, it’s no secret that the property investment opportunities in 2024 are huge. Before too long, we’re bound to see confidence in the market rise even more – bringing more demand to a stretched market. Not to mention, we are already seeing some incredible results from our savvy clients across Australia.
With a combination of indepth research and tailored strategic planning, we’ve got your back when it comes to long term property investment. At Propell, we’re all about understanding your unique circumstances to help you achieve financial freedom.
Want to learn more about investing in 2023?
Reach out HERE, or give us a call on 1300 776 735 – we’d love to hear from you!
