January is typically the slowest month for property sales, and 2024 is no exception to the rule. As the industry takes a well-earned short break over Christmas and the New Year, the market usually comes back to life in late January with more properties going to auction and a range of new listings popping up.
Despite most home loan interest rates climbing over 6% toward the end of 2023, house prices were surprisingly strong to close the year. The senior economist of PropTrack, Angus Moore, stated that “we were expecting that would have more of an impact on home prices and we were expecting to continue to see prices decline through 2023, as they did in 2022, and that just wasn’t the case – prices were remarkably resilient”.
The forecast for 2024 is to expect much of the same, but at a slower pace of growth than seen across 2023, and especially over 2021. In their December 2023 Property Market Outlook Report, PropTrack predict that “Price growth is forecast to continue into 2024, with the supply of homes for sale predicted to remain subdued relative to buyer demand. Furthermore, population growth is likely to outpace development activity, which will continue to be hampered by high costs and build times”. Whilst demand is set to continue to outweigh supply, PropTrack advise that “affordability is likely to remain very stretched, and demand from first-time buyers remain subdued, is part of why we expect home prices nationally will grow at below-average pace over 2024”.
Our home loan customers may find that this growth in property prices has significantly increased their equity position. Most lenders tier their home loan interest rates based on a percentage of borrowings against the value of the property. Because of this it is really important to revisit home loan interest rates to establish if you have fair value with your existing loan provider, or if you should chase a better deal elsewhere.
Inflation data for December 2023 is set to be released on the 31st of January, and with continued decline we should see the RBA keep the cash rate on hold at 4.35%. We shouldn’t expect home loan interest rates to be slashed anytime soon, as it is likely that rate reductions will be managed quite conservatively by the RBA and subsequently home loan lenders. This is all to ensure inflation reaches the targeted level, and that it is sustainable. We are hoping to see rate reductions toward quarter 3 of 2024, on the back of an improving economic position nationally.
We will see more and more digital revolutions in the lending space, with banks investing heavily into their processes and systems to create better customer experiences through tech. As you have probably come to find, branches are harder and harder to come by, as the digital way of banking further becomes the mainstream for the majority of transactions.
In a world that increasingly advances to the digital space, we want our clients to know that we are still here with a physical presence in our various locations. Whether you prefer the good old-fashioned face to face appointment or favour a video meeting, we will still provide the trusted personable service that we always have at Bernie Lewis Home Loans.
