Looking for more property advice to guide your property journey? Visit sitchu.com.au/property Interest Rates Expected to Fall In what will be music to many a mortgage holder’s ears, the latest OECD Economic Outlook for Australia predicts the cash rate will remain at 4.35 per cent until the second half of 2024, at which point the Reserve Bank of Australia (RBA) is expected to start cutting rates. Domestic experts, while slightly more cautious, also agree. Westpac’s group chief economist Luci Ellis recently said, “It is more likely than not that the RBA has reached the peak of its rate hiking cycle.” While Adam Boyton, head of economics at ANZ – while not explicitly ruling out a rate rise – expects the cash rate to remain unchanged before a modest easing cycle starts late next year. First Home Buyers Support A new government initiative, the Help to Buy scheme, is set to begin in 2024, allowing first home buyers to acquire property with a 2% deposit and no lender’s mortgage insurance. The government will co-own a portion of the property, offering support without interest or rent on this share. Income limits and property price caps apply to this scheme. Easing Migration Levels Australia experienced a record-high net overseas migration of 518,000 in the 2022-23 financial year, driven by returning students and workers postpandemic. However, the Albanese government’s ten-year migration strategy forecasts a reduction to 375,000 in FY24 and 250,000 the following year. This shift is expected to alleviate pressure on the tight rental market. Government Investment in Housing The federal government has allocated billions to enhance housing supply and affordability, implementing new measures aimed at addressing current imbalances. Initiatives include the construction of 1.2 million new homes, increased funding towards social and affordable housing, a 15% increase in Commonwealth rental assistance and planning, zoning and land release reforms. A Better Deal for Renters National legislation is proposed to further protect renters’ rights, limiting rent increases to once annually and allowing eviction only for justifiable reasons. The ban on rent bidding and improvements in rental application processes, along with safety standards for rental properties, demonstrate the government’s commitment to providing better protection for renters. Property Market Outlook: What’s in Store for 2024? With fluctuating interest rates, inflation and constrained supply, the property market has been a dynamic landscape to say the least. Despite the challenges, Australian property prices have continued to remain resilient, increasing by 8.1% in 2023. Here, we look at the key trends in property for the year ahead. Source: ABS, Elite Agent, ABC News and Ministers Treasury Portfolio. 11 SITCHU MAGAZINE
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