But there will also be a combination of growth drivers that should lead to a period of strong property price growth in 2024 with a confluence of the following:-

• Surging migration creates an unprecedented demand for dwellings
• Very little new building in the pipeline and any new construction will have to be considerably more expensive to make it financially viable
• A relatively strong Australian economy with historically low unemployment rates
• Federal and State Government spending, initiatives, and infrastructure projects
• Relatively low levels of stock of properties for sale
• Historically low vacancy rates and skyrocketing rents
• The security that interest rates are near their peak if they haven’t already peaked.
• A return of international demand for Australian property

Thinking strategically, this means that now, at the early stages of a new property cycle will be a window of opportunity for savvy investors to really amplify their wealth position.

I went on record late in 2022 saying that our property markets would reset in 2023.

In fact, it happened a little earlier than I anticipated and now both buyers and sellers have re-entered the market and property values have been steadily increasing month after month since early this 2023.

In fact, we’re already experiencing FOMO (fear of missing out)  in some markets which is pushing property values even higher.

And for those worrying can property values keep increasing remember how Sydney property prices increased from around $27,000 in 1973 to over $1.1 million in 2023 — can you imagine where they will be a few decades from now?

Note: For many. now could be the best opportunity in decades to get into the property market!

It is likely the confluence of multiple growth drivers will lead to continued property price rises throughout 2024, but price growth is likely to be a little slower than the double digit growth many markets experienced in 2023.

While average capital city home prices are likely to rise by around 7% this year and a little less next year, making such broad-brush statements can be misleading.

It is likely that houses will outperform apartments, and while currently, all segments of the market are performing strongly, higher-end, more expensive properties are likely to outperform the cheaper segments of the market where high interest rates, the cost of living and low wages growth will bite..

Investor interest is already picking up, and as they return to the market, as they always do as the cycle moves on, this will extend the length of our property price boom.

As the news gets better for property and the media reports rising auction clearance rates, rising house prices and increasing consumer confidence, a whole group of new buyers will also enter the property market, buoyed by a strengthening economy, growing employment, and renewed confidence in the direction Australia is heading.

This will serve to increase competition for property which will potentially drive up prices and most importantly, absorb quality stock, making it harder for you to secure a solid investment.

This is likely to happen for two main reasons:

1. Confidence. When we are more confident about our financial future, interest rates, inflation and our jobs we make big buying decisions such as purchasing new homes or investments.

2. Competition will increase as buyers return to the market.

We’re in for a 2-tier property market

Now don’t get me wrong. Not all property markets will rebound strongly this year.

Properties located in the inner and middle-ring suburbs, particularly in gentrifying locations, will outperform cheaper properties in the outer suburbs.

The reason being, the rising cost of living, higher mortgage costs and rents have adversely affected low-income earners to a greater extent than middle and high-income earners, while many affluent Aussies who have paid off their mortgage have not been hit at all.

High-rise apartment towers which were already suffering from the adverse publicity of structural problems prior to Covid19 will now become the slums of the future as they are shunned by homeowners and investors.

And like after every downturn, there will be a flight to quality properties and an increased emphasis on liveability.

As their priorities change, some buyers will be willing to pay a little more for properties with “lifestyle appeal” and a little more space and security, but it won’t be just the property itself that will need to meet these newly evolved needs – a “liveable” location will play a big part too.

To many, liveability will mean a combination of:

1. Proximity – to things like parks, shops, amenities and good schools
2. Mobility – access to good public transport (even though this may be less important moving forward) or a good road system
3. Access to jobs

The bottom line is that for those with a secure job and who have their finances under control, now could be the best opportunity in a decade to set themselves up for the opportunities that will present themselves as our property market head into a perfect storm with a confluence of growth drives in 2024.

It should come as no surprise that getting a good team around you will be an important investment and not an expense and should allow you to build a property portfolio that will go a long way to replacing their income in the future.

At the same time, you must learn that property investing is not a get-rich-quick scheme and to achieve your future financial goals you will have to slowly build a substantial asset base and not chase short-term cash flow as many beginning investors do.

Final tips so you’ll know exactly how to invest

1. Formulate a plan: understand your end goals – what you want to achieve – and then make investment decisions accordingly.
2. Be cautious: You’ll find everyone is happy to give you advice. Rather than listening to well-meaning friends, it’s important to only listen to people who have achieved the financial independence you’re looking for and who’ve maintained it through a number of property cycles.
3. Understand the difference: between a salesperson and an advisor. Many salespeople are cloaked as advisors and while they suggest they’re representing you, in fact, they are representing the seller or a property developer. Only take advice from someone who is independent and unbiased rather than someone who is trying to sell you something.
4. Be prepared to pay for advice: I’ve found that good advice is never expensive. In fact, it’s much cheaper than learning from your property investment mistakes.
5. Not everything that glitters is gold: often when you start out it can be tempting to see opportunities everywhere. The problem is you don’t yet have the perspective to decide what is a good investment and what is not.

The property doesn’t discriminate; it doesn’t care who owns it.

The residential property market is worth well over seven trillion dollars today and over the next decade, it will increase in value by billions and billions of dollars.

If you get it right, you can have your share.

About Michael Yardney
Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He’s once again been voted Australia’s leading property investment adviser and one of Australia’s 50 most influential Thought Leaders. His opinions are regularly featured in the media.