Let’s be brave again and delve into what 2024 might have in store for Melburnians, blending architectural foresight with broader market dynamics. Gazing through the “crystal ball”, the year ahead presents a mix of challenges and opportunities for Melbourne’s housing market. Ironically, what stands out as a possible stimulus for Melbourne’s prospects is the fact that it was the worst-performing market in the country over the last few years. At the same time (post covid) that other markets have almost doubled in value, Melbourne has gone “sideways”. We beg the question, will Melbourne “drag” down the country, or will increased values Australia-wide stimulate a “catch up” where investors now see value?
We suspect the latter!
While Melbourne grapples with a nuanced interplay of higher interest rates and extra taxes, one feels increased immigration/population will stimulate demand, whilst investors should surely see value in comparison.
Our 2024 Housing Market Predictions
Rental Market Resilience
Melbourne’s upward trajectory in rental rates mirrors broader national trends, suggesting a level of resilience to combat any economic headwinds.
Immigration Needs
The housing needs for immigration extend across a wide spectrum of the housing market. While the majority of new arrivals seek the cost-effective outer suburban dwelling, there are “cashed up” foreigners and returning Aussie Expats seeking the luxurious side of the “Great Australian Dream”. 2024 might also be the year that Hongkongers or Mainlanders relocate their families to a place that offers a cultural snippet of home but with Western comforts. Melbourne offers all of the above better than any other location.
The Great Australian Dream
Infrastructure Upgrades
Besides the expected immigration, the massive infrastructure projects nearing completion will add value to the property that has traditionally followed such urban upgrades. Road, rail, parks, schools, and hospitals have been added at unprecedented levels, Victoria-wide. Those benefiting most should enjoy a boost in house value.
Melbourne’s Value
As discussed, in comparison to the rest of the country, Melbourne seems undervalued; therefore, we expect a “catchup” at some point in 2024. We are now two Australian Opens and Grand Prix races since lockdown, and events like these remind the world why we can still be “The World’s Most Liveable City”.
Interest Rates
Up, down or on hold will be the question in 2024. Our guess is holding and leaning towards a reduction later in the year. If monetary policy loosens, we expect quite a sharp increase in Melbourne housing values and a ramping up of home construction.
What Housing Trends Are Likely in 2024
Encouragingly, the normalisation of builders and building costs serves as a stabilising factor amidst the shifting tides of the market. The talk of a lowering of rates will help as much as any actual reduction.
Building
Generally, new home construction will try to ramp up against a backdrop of overregulation.
Borrowers will try to be astute in order to get the most out of their money for any home upgrade. The “cashed up” can please themselves!
Sustainability Will Come to the Fore
The new sustainability regulations due in May will create a focus that has waned, reminding people why they pay such high energy costs. The market will realise that not only does sustainable design save money on bills, but it will also add tremendously to resale values.
Renovate or Detonate
The age-old question will continue to perplex. The answer is dependent on the particular circumstance. Labour costs are high, therefore extensions which are more intensive will prove more costly and less viable.
If property values rise, there will be more justification for home improvement despite its higher price tag.
Extending and dramatically upgrading a home is still a great option in the right circumstances.
Knock-down and Rebuilds
The secret is out that “mum and dad” owners are best placed to be property investors, particularly using their own properties. A Knock-down and rebuild of one dwelling seems too extravagant given the interest rates, however knocking down to build two family homes is a clever “have your cake and eat it” choice for those wanting a new family home and a bonus commodity to pay for it.
Read our blog on The Smart Way to Create Your Family Home.
Building two family homes for not much more than the price of one is a project that owners of ageing houses should consider, given it can pay for itself.
In summation, the Melbourne property market in 2024 will offer challenges and opportunities. Our expectation is that housing values will “ramp up” later in the year or early 2025. We feel it might be a year to look back on and say, glad I built or purchased then.
House Design and Property Development Services Melbourne
House Design Solutions is a Building Design firm that has been helping Melburnians develop their property for over 30 years. Whether it is a house renovation or detonation, a rebuild or a unit build, we are proud of our contribution to helping our people. Our testimonials page, which reflects our client’s Facebook or Google reviews, tells our story through the eyes of others.
“Cashed up” foreigners and returning Aussie Expats seeking the luxurious side of the “Great Australian Dream” could do worse than this project designed in Mont Albert.
