Expect a year of two halves from 2024

What are the implications for property investors?

Projected tax cuts in 2024 will bring a range of benefits for property investors. Increased consumer spending and economic growth will drive up rental property demand. However, it’s crucial to acknowledge the ongoing rental crisis and undersupply. More disposable income could intensify competition, raising rents and yields. Higher yields may attract more investors, leading to greater overall supply.

Middle-income Australians may discover an increase in their borrowing potential. As a result, those individuals who were previously relegated to the rental market indefinitely may now have the opportunity to step onto the property ladder.

This not only helps renters become homeowners or investors but also eases the rental crisis by increasing the supply in a tight market. It also enables current property investors to expand their portfolios and achieve their financial goals.

Is an interest rate hold likely to stay?

Yes.

According to Finder’s latest RBA Cash Rate Survey, an overwhelming majority of the 27 economists and experts surveyed believe that interest rates have reached their peak.

According to forecasts from CBA, Westpac, and NAB, it is anticipated that interest rates will decrease either this year or in 2025 at the latest. This potential decline could bring the cash rate to a neutral level of approximately 3%.

Stable interest rates are not only good news for property investors, but also for home buyers looking to secure a mortgage. With rates expected to remain low and possibly decrease in the future, this provides an ideal environment for those looking to enter the property market or expand their existing property portfolio.

What do the changes mean?

A decrease in interest rates would provide an opportunity for investors to access cheaper financing options, allowing them to expand their portfolios or take advantage of any opportunities that may arise.

These predictions from the experts are based on the assumption that the economy will remain stable. However, property investors should stay vigilant as unforeseen changes, whether on an international or domestic level, could lead to different outcomes. Keeping a close watch on interest rates and their potential impact on the market is key.

While tax cuts, interest rate cuts, and lower inflation are favourable factors, it is equally important to prioritise saving for unexpected circumstances. It’s a good idea to have surplus funds set aside for a rainy day!

Remember, real estate is a long-term investment. making hasty decisions based on short-term fluctuations is not the path to financial success. The current market conditions should not be the sole factor in your decision-making process. However, it is clear that they do provide a favorable environment for property investment

Is 2024 the right time to get into the property market?

As 2024 unfolds, the economic landscape appears to be a tale of two halves, each marked by distinct dynamics that promise both challenges and opportunities for prospective property investors.

If you’re weighing up between investing ow versus the second half of the year when interest rates may lower, consider that property prices will likely increase as a result of the decrease in interest rates. There is currently a window of opportunity with rental properties in high demand, yields high, and rising prices on the horizon. Conversely, with tax savings and interest rate cuts coming in the second half, serviceability and borrowing capacity can improve further.

So, is 2024 the right time to get into the property market? It ultimately depends on your individual circumstances and goals. But with the coming tax cuts, low interest rates and potential price growth, it could be a very favourable time for those looking to enter the market or expand their existing portfolios.

As always, don’t forget to do your research and seek professional advice before making any major financial decisions. Keep an eye on market trends and stay informed about economic changes that may impact the property market.

At Ironfish, we help investors navigate the ever-changing property market and tailor strategies that align with their goals. Our experienced team can provide insights into current market trends, identify potential opportunities, and guide investors through the process of building a successful portfolio. With careful planning and research, 2024 could be an ideal time to make your mark in the property market. Don’t miss out on this window of opportunity.