From Rising Buyer Confidence to Regional Migration - Aug 2024

Buyer Confidence Surges to 83%

Feeling the squeeze from high property prices and interest rates?

You’re not alone.

But here’s the thing—there’s a silver lining in this ever-shifting market.

From the rise of creative strategies like rentvesting to a surge in property listings, fresh opportunities are opening up all around Australia.

If you’ve been waiting for the right moment to make your move, now might be the time.

Let’s explore the latest trends shaping the property market as of 23 August 2024, and see how you can turn these changes into your advantage.

Buyer Confidence Surges with More Listings

Despite the challenging market, 83% of prospective buyers are confident about purchasing a property—up from 70% last quarter, according to the Mortgage Choice Home Loan Report.

What’s driving this optimism?

• Increased listings mean more choices for buyers.
• However, record-high prices and interest rates are forcing many to compromise:3 out of 5 buyers are looking at regional areas or further from city centres. Many are opting for smaller homes, apartments, or duplexes.

The buying process is taking longer, with 62% of buyers facing delays and one-third needing multiple pre-approvals. Despite these hurdles, buyers are focusing on timing that works for them, rather than trying to predict rate movements.

Rentvesting: A Growing Trend for First-Time Buyers

As property prices and interest rates climb, more first-time buyers are turning to rentvesting—buying an investment property in an affordable area while continuing to rent where they live.

• Sydney resident Hayley McCoy bought in Brisbane while renting in Sydney, building equity in a more affordable market.
• Analysis by Mozo shows 6.8% of first-home buyers in 2024 are also investors, up from 4.2% in 2020.

Financial experts like Helen Baker emphasize the importance of careful planning.

While rentvesting offers a valuable foothold in the market, it comes with risks, such as higher interest rates on investment loans and the possibility of negative cash flow. Thorough financial planning is crucial to navigating these challenges.

July Sees a Surge in Property Listings

July brought relief to home seekers as property listings surged across Australia:

• 10% increase in new listings in capital cities.
• Total listings are now 14.4% higher than a year ago.

This surge is shifting market dynamics:

• Sydney and Melbourne are becoming more like buyer’s markets.
• In smaller capitals like Brisbane, Perth, and Adelaide, sellers still hold the upper hand, but rising listings are expected to ease market pressure.

Reserve Bank’s decision to delay an interest rate cut prompted some struggling homeowners to sell, making sellers more negotiable and creating fresh opportunities for buyers.

Regional Migration Hits a New High

Australia is witnessing a significant shift as more people opt for regional living over city life. The Regional Movers Index (RMI) reveals that the June 2024 quarter saw:

• 27% more people moving from cities to regions than the reverse.
• City-to-regional relocations are 16% above pre-Covid levels.
• Regional-to-regional moves are up 10%.

Regional Australia is becoming increasingly important for the nation’s future.

Emerging hotspots like Lake Macquarie and NSW’s South Coast are drawing more people with their attractive lifestyles and access to essential services.

The Australian property market is evolving, and whether you’re buying, rentvesting, or considering a move to a regional area, understanding these trends is crucial.

Rasti Vaibhav

The Architect of Property Wealth

Next steps: Should you want to learn how the author built his $5m balanced portfolio in 7 years and aspire to own something similar, feel free to get in touch via email at rasti@getrare.com.au or book an appointment here.

Disclaimer: This article is general in nature and does not take into account your situation. You should consider whether the information is appropriate to your needs, and where applicable, seek professional advice from a financial adviser.