Property Weekly Pulse with Rasti:
Week Ending 19 Apr ’24
Welcome to our latest update on the Australian property market, where we delve into the emerging trends shaping real estate in 2024. This year, we’re seeing a dynamic shift as Millennials and Gen X increasingly dominate property investments, regional markets surge ahead, and the rental landscape experiences significant price adjustments. Join us as we explore these developments and their implications for investors and homebuyers alike, providing you with the insights needed to navigate this evolving market landscape.
The New Age Investors: Millennials and Gen X Leading the Way
The latest analysis from Commonwealth Bank unveils that Millennials and Generation X are setting the pace in the property investment market. In 2023, Millennials (born between 1981 and 1996) constituted 46% of new property investors, closely followed by Generation X (born between 1965 and 1980), who made up 37% of the purchases. This shift not only highlights the changing demographic of property investors but also points to a broader evolution in real estate dynamics.
● Average investor age is now 43
● Typical loan sizes are reaching upwards of $500,000
● Michael Baumann, Commonwealth Bank’s Executive General Manager of Home
Buying, notes the rising trend of ‘rentvesting’—a strategy where individuals invest in
affordable areas while renting in more desirable ones.
Rents Continue to Rise: The Rental Market’s Upward Trajectory
2024 has started with a notable increase in rental prices, with a 5% rise in the first quarter alone, marking the largest quarterly surge in 17 years, according to the Domain Rental Report. This growth underscores the persistent supply-demand imbalance affecting the rental sector.
● Notable rent increases across major cities, including Adelaide, Perth, Melbourne, Brisbane, and Sydney
● The pressure on rents continues despite a slowing pace compared to the previous year, with rents still climbing significantly across the board.
Investors and FHBs Back: Resurgence in Home Loans
February data from the Australian Bureau of Statistics indicates a strong resurgence in home loan activity, particularly among investors and first-home buyers. This marks a continuous growth in market confidence and investment opportunity, showcasing a 1.5% increase in mortgage commitments which amounts to $26.4 billion.
● Mish Tan, Head of Finance Statistics at ABS, highlights a significant 21% annual increase in loans to both investors and first-home buyers
● Notably, first-home buyer loans rose by 4.8% in February, demonstrating market resilience.
Regional Price Growth: Outpacing the Capitals
According to PropTrack data, regional house prices are experiencing unprecedented growth, the highest since the onset of the pandemic in March 2020. This trend reflects a significant shift in preferences towards more affordable and lifestyle-appropriate properties outside of the capital cities.
● Eleanor Creagh, PropTrack’s Senior Economist, reports a 66.5% increase in prices in Regional Queensland since 2020
● Other regions such as Regional South Australia, Western Australia, and NSW also showing robust growth compared to their urban counterparts.
The evolving Australian property market offers diverse opportunities for both seasoned investors and those new to real estate. Understanding these shifts and the underlying trends is key to navigating this dynamic landscape.
By Rasti Vaibhav,
The Architect of Property Wealth,
