Navigating the 2024 property market
Teleisha Thomas
March 2024With over 25 years’ experience in the property industry, most recently as the Managing Director of Jellis Craig Stonnington and Yarra, and Jellis Craig Board Member, Andrew McCann transitioned into his new role as CEO of Jellis Craig in March 2024. Andrew’s experience and insight is invaluable, and we were delighted to sit down with Andrew to get his perspective into what the property market has in store for the remainder of 2024 and into the future.
Melbourne’s dynamic property market has started 2024 with a promising start, showcasing its ongoing evolution and resilience.
Auction clearance rates have started the year strongly and consumer sentiment is rising (up 6.2% to 86 points in February, a twenty-month high#), this lift is driven by cooling inflation and an improved outlook on interest rates. Both positive signs that now is a good time to transact.
At Jellis Craig, as with the rest of the market, we are experiencing an increase in volume of property compared to the same period in March last year (up 28% in 2024*).
With more certainty in the economic outlook, along with an increase in volume of property available, we are seeing these factors translate to early signs of a boost in confidence in both buyers and sellers.
Further encouraging data shows that whilst there is more property available to purchase, more people are inspecting property, again indicating that demand has increased broadly across our marketplace.
The premium end of the market is showing very positive signs. Thanks to an increase in net migration, we are seeing a real strengthening at the top end of our prestige markets across segments of Bayside, Boroondara, Port Phillip, and Stonnington.
Whilst activity abounds, there are some markets that are feeling the pressures of increased borrowing costs and taxation. Construction and building costs, whilst becoming more controllable, are still viewed by some in the market as prohibitive and as such we’re continuing to see the popularity of renovated and newly built properties.
Challenges in the property market outside of Metropolitan Melbourne centre around increases in land tax. Taxation changes are having an impact on the flow of listings in regional Victoria and markets such as the Mornington Peninsula, where our clients are considering rationalising their property portfolios due to cost increases.
It has been an interesting period for the rental market. Economic impacts are being felt by investors, with an increasing number looking to sell amidst the challenges of both escalating debt servicing costs, and the ramifications of a more stringent residential tenancy act. As reported by the AFR, Ex-rental listings in Victoria jumped by 52 per cent… in the year to January, according to data released by property analytics firm Suburbtrends. On the flip side, investors that are maintaining their position in the market are seeing an increase in their rental return and yield. Metro-Melbourne is experiencing all-time low levels of vacancy rates (0.8% vacancy rate for the month of February^) and rents hit a record high last month, jumping 10.8 per cent in Melbourne to $574~, which has been positive for our more than 20,000 investor clients.
For this situation to rectify in 2024 and beyond, Governments will need to stimulate the economy for more housing through either build-to-rent development schemes or proposed incentives for more residential investors to enter the market. We continue to advocate for action and support in this area for the benefit of our community.
With just over one week until Easter and then the inevitable slowing down of listings over the cooler months and winter school holidays, it is no wonder there continues to be healthy levels of competition on available homes. Each local market is unique, with its own specific idiosyncrasies. Speaking to your local Jellis Craig property expert and attending auctions and opens in your area will help to give a complete picture of your local market.
#Source: Westpac Consumer Sentiment Index
*Source: ListOnce Data
^Source: Domain
~Source: CoreLogic
