Forrestfield 
The Australian property market stayed strong in 2023 across most regional areas and capital cities, leaving investors wondering what their next best move will be.
If you’re thinking about buying your first investment property or adding to your portfolio in 2024, keep the following figures and expert opinions in mind.
What are the forecasters saying?
The Australian housing market proved to be more robust than expected in 2023, and the national average house price reached $753,654, according to CoreLogic. Experts say the upwards trend is expected to continue, with prices estimated to rise by around 5 to 7 per cent nationwide and by as much as 9 per cent in some cities during 2024.
House prices have been rising due to a lack of stock caused by building industry shortages and an influx of post-pandemic migration. Rental yields have been incredibly positive as well, with some real estate agents reporting that vacant apartments are being re-tenanted within a single day. Reports say rents rose by 13.2% for houses and 23.7% for units in between September 2022 – 2023. This is great news if you are an investor because it means you are unlikely to find your property standing empty and can charge a premium to offset the cost of the mortgage.
With this being said, the factors which may come into play to prevent major price rises in 2024 are the following:
• The potential for additional interest rate rises has not been ruled out by the RBA. High interest rates makes purchasing and holding properties more expensive.
• The state premiers are actively working on new housing initiatives, to increase development in key areas so there is increased availability.
News for overseas investors
It was announced in early December that overseas investors may have to pay even higher fees when they buy in Australia.
Under the measures the Labor Government has proposed, a foreign investor would pay $84,600 in application fees when buying an existing property worth $1.1 million and will face an annual vacancy fee of $169,200 if the property is unoccupied for more than six months throughout the year. If you’re a keen investor it’s worth keeping an eye on this policy as it may reduce competition from overseas buyers.
To counter this, fees for Build-to-Rent projects will be reduced. This is hoped to encourage foreign investment in the creation of new homes, which will create jobs and increase rental property availability.
Where to invest in 2024
With property prices forecast to rise in most parts of Australia, experts predict it will be difficult to go wrong with an investment property in 2024.
Experts are still pointing to regional areas as a savvy strategy, especially for beginner investors. Destinations like Rockhampton in Qld and Rockingham in Perth have good investment potential thanks to infrastructure projects and demand from tenants.
As for metropolitan areas, after very strong growth in Adelaide and Perth in 2023, Sydney is back on the map in 2024, with prices in the harbour city expected to rise by up to 9 per cent this year.
For more specific investment opportunities, Australian Property Investment Magazine has pointed to the following:
• Sydney:
- Engadine
- Northmead
- Mortdale
• Melbourne:
- Yallambie
- Croydon South
- Heathmont
• Brisbane:
- Alexandra Hills
- Capalaba
- Carseldine
• Adelaide:
- Meadows
- Nairne
- Woodside
• Perth:
- Eden Hill
- Edgewater
- Greenmount
• Hobart:
- Lauderdale
- Lindisfarne
- Risdon Vale
• ACT:
- Banks
- Chifley
- Gowrie
• Darwin:
- Howard Springs
- Humpty Doo
- Wanguri
How to choose the right investment property in 2024
No matter where you invest, there are factors to keep in mind:
• Look for a place in a growth area, with incoming infrastructure like schools, shops and transport interchanges.
• Check upcoming developments; a brand new multi-storey development may impact the value of your investment.
• Aim to purchase an investment property close to shops and public transport.
• Find cost-effective ways to make the property appealing to tenants; for example by refreshing the kitchen and bathroom.
• Think about who would like to rent the property and how you can make it suitable for them, for example a family home with a home office or an apartment for students that is close to the university campus and has good security.
• Buy in a place where you are highly likely to have your choice of renter applications so you can put someone trustworthy in the home.
Get advice from a Professional
Key advice for property investors is to gather a team to support you. Work with your accountant and mortgage broker, and connect with a local real estate agent who can guide you towards an investment property that has the potential to attract high-quality tenants and experience strong capital growth.
