Australia’s Property Market: A Growing Powerhouse
Did you know the Australian property market is expected to hit a remarkable $11 trillion by the end of 2024? This long-standing pillar of the economy has delivered consistent long-term annual growth of 8%, proving its resilience and value as a wealth-building asset.
For generations, Australians have turned to property investment to secure their financial futures. In today’s market, savvy investors recognise the opportunity to get ahead of upcoming trends. Whether you’re a first-time investor or looking to expand your portfolio, now is the time to act.
Emerging Hot Spots Offering Big Opportunities
Sydney remains the most expensive housing market in Australia, with a median house price of $1.6 million. Thankfully, it’s not the only place to focus your property investment ambitions. Cities like Brisbane, Adelaide, and Perth are emerging as affordable yet high-growth alternatives.
With median house prices around $850,000—just half of Sydney’s prices—these cities present an attractive opportunity. They combine affordability with robust economic fundamentals and strong growth potential. From 2020 to 2024, property values in these cities increased by an impressive 80%, outperforming expectations.
Population Growth Fuelling Demand
Australia is leading the pack among developed nations in terms of population growth. With an annual increase of 1.3% – and as high as 3% in Perth and Brisbane during 2023-24 – our growth rate far outpaces those of countries like the United States and the European Union.
By 2030, Australia’s population is expected to reach 30 million. This growth will place enormous upward pressure on housing prices, especially in capital cities like Sydney, Melbourne, Brisbane, Perth, and Adelaide, where new residents are most likely to settle.
Compounding the issue is a shortfall in housing supply. In 2023-24 alone, the market faced a shortage of 130,000 dwellings, creating a perfect storm of high demand and limited supply.
A Housing Shortage Creating Competition
The housing supply challenge is exacerbated by a significant drop in building approvals, which hit their lowest levels in a decade in June 2024. Monthly approvals fell to just 13,500, compared to a long-term average of 16,000–17,000. Rising construction costs and labour shortages have rendered many development projects financially unviable, delaying much-needed housing stock.
Vacancy rates in many cities now sit below 1%, far lower than the healthy range of 2–3%. With fewer properties available for rent or purchase, competition has intensified. Property listings have also fallen by 23%, from 300,000 before 2020 to just 230,000 recently. This chronic undersupply only increases pressure on prices and demand.
Investors Are Leading the Charge
Amid these challenges, investor confidence is soaring. Data from the Australian Bureau of Statistics reveals that total housing loan commitments jumped from $23 billion in February 2023 to $30 billion in September 2024 – a 47% increase.
Investor activity is particularly robust in Queensland, South Australia, and Western Australia. These regions saw investor loans rise by 73%, 64%, and 78%, respectively, between February 2023 and September 2024. High rental yields, strong population growth, and affordability make these states ideal for property investors.
Why Borrowing Could Soon Become Easier
Borrowers have faced challenges in recent years with the cash rate sitting at 4.35%. However, relief is on the way. Economists from leading banks such as ANZ, CBA, Westpac, and NAB predict interest rate cuts beginning in early 2025.
Lenders are already responding by reducing fixed interest rates across various loan products. Lower rates are expected to stimulate demand further, offering a unique opportunity for investors to secure favourable terms before the next market surge.
Take Action to Secure Your Financial Future
The Australian property market is primed for action. With demand rising, supply constrained, and interest rate relief on the horizon, there has never been a better time to invest. By acting now, you can position yourself ahead of the next growth phase and secure long-term wealth for yourself and your family.