12/19/2023

House prices and sales volumes tipped to rise in 2024 despite cost-of-living concerns 

  • Volumes set to increase as more Australians expect to sell their home and buy a new one in 2024 
  • Property prices and rents tipped to keep rising 
  • Cost-of-living pressures are greatest concern for Australians 

Australians’ enthusiasm for selling their homes and buying new ones has not been dampened by rising interest rates and fears of an economic slowdown with property transactions tipped to increase in the new year as house prices and rents continue to rise. 

The Dye & Durham Australian Pulse Survey for the December quarter found 8% of the population was likely to sell a primary residence to purchase another one in the next 12 months.  

This was unchanged from the September quarter despite the Reserve increasing in the official cash rate for the 13th time in the current cycle in November and new economic figures showing the pace of economic growth was easing. 

The 8% per cent of people planning to sell and buy another primary residence compares with only 2% of the total population who had sold a primary residence to buy a new one in the previous 12 months.  

Managing Director of Dye & Durham Australia, Dennis Barnhart said that property transactions are on the rise. 

“After a downturn for much of 2023 on last year’s volumes, as sellers held back going to market, we are seeing settlement levels returning to close to the same level as 12 months ago,’’ Mr Barnhart said. 

“This is most likely being driven by more stock being put on the market as interest rates near the top of the cycle,’’ Mr Barnhart said. 

The survey of 1604 Australians taken from November 29 to December 3 by Resolve Strategic, found significant pent-up demand in the property market with 24% of respondents waiting for interest rates to drop before transacting and 26% waiting for purchase prices to drop before entering the market. 

More than two thirds of respondents (69%) expected housing prices to continue to rise over the next 12 months compared with only 7% who expected prices to fall.  

More than three-quarters of respondents (77%) believed rents would continue to increase with only 3% of respondents believing they would fall.   

The number of people likely to buy an investment property to rent out declined 1% in the past three months to 10%. 

The number of respondents intending to buy their first home also fell by 1 point to 7%. 

When results in the survey were filtered to only those likely to buy or sell a house in the next 12 months, 15% said they were likely to sell their primary residence to buy a new one in 2024, which was same as for the September quarter survey. 

However this was a significant rise on the past year. When the results were filtered for those likely to buy or sell a house, only 4% said they had sold their primary residence in the past year to buy another one. 

The proportion waiting for a fall in interest rates before buying or selling fell to 32% in the December survey from 35% in September quarter, while the number waiting for purchase prices to increase before selling fell to 19% in the latest survey from 21% in September.  

The survey was initiated by Dye & Durham, a leading global legal-technology company, that provides practice management software to legal professionals, including best-in-class property conveyancing workflows, as well as property search capabilities to help lawyers and their clients complete any transaction with certainty and reliability. 

Resolve Strategic founder Jim Reed said higher income earners had slowed down their sales of primary residences in the past 12 months while 18–34-year-olds who were lucky enough to have a foot on the property ladder were also not changing properties. 

Cost-of-living pressures rise with almost half of Australians saying they are worse off 

More than two-thirds of Australians (69%) rate cost-of-living pressures as very important with housing costs being an important subset at 53% very important.  

Almost half of Australians (48%) reported they were worse off financially than this time last year, a 2-point rise on the September Pulse survey.  

Trades qualified (53%), people without employment (59%) and lower income earners (57%) and renters (52%) were the groups with the highest proportion of people considering themselves worse off. 

One third (33%) considered their financial position would worse further over the next year. Only 24% believed their financial situation would improve over the next year. 

Survey respondents were also pessimistic about the direction of the economy with 58% expecting Australian to enter recession next year (if it was not already in recession). 

Support is divided for the Stage 3 tax cuts, which are due to be introduced from July 1 next year and would reduce the tax rate on all income between $120,000 to $200,000 to 30% and introduce a top marginal rate of 45% for income above $200,000. 

One third of respondents (33%) supported the tax cuts while 24% opposed them.  

Support increased modestly to 41% when an alternative design that preferences low and middle-income earners was put to respondents.  

Download the full Dye & Durham Australian Pulse Q4 Report here.

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