The Australian Property & Sydney Real Estate Predictions For 2024
The Australian housing market has been on a rollercoaster ride in recent years, with Sydney at the forefront of these dynamic shifts. The ANZ Housing Affordability Report paints a sobering picture for Sydney households in the near future, with sustained higher interest rates casting a shadow over affordability prospects. Eliza Owen, Head of Research at CoreLogic, anticipates a challenging trajectory for housing affordability in Sydney in 2024.
For aspiring homeowners, the path to property ownership is becoming increasingly lengthy. According to the Australian Financial Review, the national average time to accumulate a 20 per cent deposit now stands at a staggering 10 years. In Sydney, the situation is even more challenging, with homeowners requiring an average of 12.6 years to save for a deposit.
The financial burden of owning a home in Sydney is also on the rise. Servicing a new mortgage in Sydney now demands a record-high 58.1 per cent of income, a significant uptick from the 48.9 per cent recorded just a year ago. Sydney flats may appear as a more affordable option, with 43.3 per cent of income allocated to financing a new mortgage. However, this figure still represents a substantial increase from the 37 per cent reported a year earlier.
While homeowners grapple with affordability concerns, renters are also facing mounting pressure. The rental property market has witnessed a notable surge in advertised prices, experiencing a staggering 6.8 per cent increase nationwide. This escalation places additional strain on individuals seeking realistic and affordable real estate solutions.
These divergent patterns underscore the volatile nature of the Australian housing market. Concurrently, development approvals linger at 13,000 per month, a figure significantly below the historical norm of 17,000, exacerbating Australia's housing crisis.
Recent weeks have seen indications of a slowdown in the Sydney property market, with property values recording a modest 0.1 per cent increase—a considerable departure from the notable 1 per cent surge observed in the previous reporting period. This subtle adjustment suggests a deceleration in the momentum of the real estate market.
Despite the challenges, there are potential glimmers of hope on the horizon. Domain forecasts indicate a surge in generational inheritance as Baby Boomers tap into their funds to support their descendants in acquiring property and entering the real estate market. This influx of funds could provide a boost to first-home buyers and potentially ease some of the affordability pressures.
As the Australian property market continues to evolve, it is crucial for individuals and families to make informed decisions when navigating the complexities of homeownership and renting. Understanding the current market dynamics, affordability challenges, and potential future trends is essential for making sound financial choices and achieving long-term housing goals.