Dear Fellow Property Investor,
Australian big city house prices are tipped to surge by more than a third during the next three years with Sydney’s median price set to hit the $2million mark.
The increases forecast between now and June 2027 would be even more significant than the price rises since the onset of Covid four years ago, which covered interest rates aggressively rising from record-low levels as immigration soared.
Oxford Economics Australia is forecasting that Sydney’s median house price will hit $1.934million by June 2027, with Perth reaching $1million.
The median price in Melbourne and Brisbane was also expected to reach seven figures during the same period as prices rose between a third and 43 per cent.
Even before the rate cuts, Australian home lending has increased 13.3 per cent during the past year in a sign buyers fear missing out on more price rises, new official lending figures released on Monday revealed.
This means average-income earners on a $98,218 salary, and with plenty of savings for a 20 per cent mortgage deposit, are being urged to shop around now for a suburban house or inner-city unit under $640,000 to avoid missing out on the boom.
Until the Reserve Bank cuts interest rates, possibly from late 2024, banks are only able to lend a borrower 5.2 times their pay before tax.
But once the rate cuts start, banks will be able to lend more, leading to even higher prices, with values tipped to particularly soar at the more affordable end of the market.
‘The November 2023 cash rate hike to 4.35 per cent is expected to be the last this cycle, with the next movement downward,’ Oxford Economics Australia said.
‘Anticipated interest rate cuts from late 2024, overlaid by a sustained housing shortage, are set to accelerate price growth in 2025.’
Australia’s net overseas migration level hit a record high of 548,800 in the year to September but Oxford Economics Australia is expecting that to slow to 410,000 in 2023-24 and 250,000 by the 2026-27 financial year.
‘Net overseas migration is driving the current surge in Australia’s population growth,’ Oxford Economics Australia said.
‘While three-quarters of new overseas arrivals enter the rental market, which relies on investor supply, there remains a channel that is adding to the competition for established properties.’
The more affordable end of the property market is tipped to soar as baby boomers downsize and those aged 30 to 45 look to escape rising rents. ‘Strong growth in rents is likely having a spillover effect, encouraging some households to enter owner-occupation,’ the report said.
Price rises are tipped to grow by at weaker pace in cities like Adelaide and Hobart, that boomed during the pandemic but no longer receive a huge influx of interstate migration.
Canberra, now Australia’s second most expensive capital city market after Sydney, was tipped to slip into fourth place behind Melbourne and Brisbane by mid-2027 – even with a typical house price in the seven figures.
Let me ask you something…
Do you have a game plan for 2024?
Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which, in my opinion, already bottomed out in November 2022), again?
Or, will you join them?
So, what are you waiting for?
Reserve your place and join me and 55 like-minded property investors for the first Real Estate Investing Fast Track Weekend for 2024!
Click HERE to reserve your seat now!