Should I Buy a House Now or Wait Until 2025? Navigating Australia’s Real Estate Market

Despite the succession of interest rate hikes from the Reserve Bank of Australia (now on pause), 2024 is shaping up to be a promising year for the nation’s property market.

Despite a 4.25% increase in the official cash rate over the past 18 months, research suggests a strong rebound in property prices over the next six years. According to CoreLogic’s head of research Tim Lawless, Australia’s real estate market has transitioned into a stabilising phase, witnessing a notable increase in property values across the nation. From the beginning of the pandemic until January this year, capital city house values surged by 33.9%, equivalent to $239,000. Concurrently, unit values also rose by 11.2%, translating to $65,235 over the same period.

So, is the time right to purchase an investment property now, or should you hold off until 2025? Let’s take a closer look at the current state of Australia’s property market and what factors could influence your decision.

Housing Market Forecasts & Trends Australia

Australia’s housing market has defied expectations in recent years.

CoreLogic’s National Home Value Index charted a remarkable v-shaped recovery in the property market since the initial downfall due to Covid-19. What this means is that the drop in property prices was sudden, but there’s been a robust bounce back. Not only have the losses from the recent downturn been regained, but house prices have also surpassed their previous peak to reach a new record high.

Factors such as robust migration and reduced property listings are contributing to the upward pressure on house prices. With inflation likely peaking and interest rates stabilising, consumer confidence is expected to rebound, further bolstering the market.

However, it’s crucial to note that the market’s performance varies across regions, leading to a fragmented landscape. Investors must do their homework and research specific areas before deciding to purchase an investment property in any given market.

Factors To Consider Before Buying a House in 2024

Economic Outlook

The country’s economic outlook plays a significant role in determining the health of its property market. A favourable economy translates to strong consumer confidence and increased demand for housing, leading to rising prices.

Interest Rates

Interest rates are a crucial factor for potential buyers to consider. Low-interest rates can make purchasing a house more affordable, while higher rates can deter buyers from entering the market.

Migration Trends

Migration patterns have a significant impact on housing demand and property prices. Areas with high population growth attract more buyers, leading to increased competition and potential price increases.

Infrastructure Development

The development of infrastructure in an area can significantly impact property prices. Improved transportation and amenities can make a location more desirable, increasing demand for housing and potentially driving up prices.

Local Market Conditions

Local market conditions also play a significant role in determining the performance of the housing market. Factors such as supply and demand, employment rates, and vacancy rates can vary greatly between regions, making it essential to research specific areas before making your investment decision.

Buying Now vs. Waiting For 2025 – What You Need to Know

Could buying property now outweigh the potential benefits of waiting until 2025? It’s a common question that potential buyers ask themselves. While there is no definitive answer, several factors can influence this decision.

Current market trends indicate a favourable time for buyers. Driven by significant migration and a decrease in property listings, demand for housing has increased.

Source: CoreLogic

Auction clearance rates remain robust, showcasing a resurgence in capital city auction markets. The preliminary clearance rate has climbed to 76.2%, marking the highest level since June of last year. This uptrend underscores the market’s depth in major cities. Buyer sentiment is also on the rise, with some feeling the fear of missing out (FOMO) as house prices reach new peaks.

While waiting until 2025 could potentially lead to even more favourable market conditions, by acting now, individuals can capitalise on current trends within the market and position themselves for long-term financial gain.

Making An Informed Decision

Experts forecast continued growth in property values for 2024, driven by factors such as low-interest rates, robust migration patterns, and pent-up demand. However, the pace of growth may vary across regions, with some areas experiencing faster appreciation than others.

Before making a decision, pay attention to critical factors that require careful consideration:

Timing: Evaluate whether current market conditions align with your timeline and objectives.
Professional Advice: Seek guidance from real estate professionals to gain insights into market trends, investment strategies, and potential risks.
Long-Term Outlook: Take a long-term perspective when evaluating the decision to buy. Consider the potential appreciation of property values over time, as well as the ability to generate rental income.

Ironfish can provide you with the assistance you require in navigating the current property market. With extensive expertise in the Australian real estate market, our team can offer you the support, market insights, and resources needed to make informed decisions for a successful outcome.

Summary

As we continue to see a strong rebound in property markets, now is an opportune time for investors to enter the market or expand their existing portfolio. By staying informed and seeking professional advice, you are better equipped to make strategic decisions that align with your goals and financial objectives. With Ironfish by your side, you can confidently navigate the market and take advantage of current trends for long-term financial gain.

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