Just Like That – Another Year Almost Gone
Wow, just like that—11 months of the year have flown by. Christmas decorations are up, and festive season plans are already in full swing for many. I can’t believe how quickly 2024 has passed.
When it comes to the property market and the broader economy, the year hasn’t exactly wrapped up as some predicted. The idea that we might see an interest rate drop before the end of 2024? Completely off the table now. Inflation is getting close to the Reserve Bank’s target of 2%–3%, but they’re holding firm on rates. It’s a tricky balance—they see the economy holding steady despite higher rates, with job growth still strong. But there’s no denying the financial strain these rates are causing households.
What’s really interesting is the Reserve Bank’s concern about what’s driving inflation down. They’re saying it might not be real progress but rather a result of Federal Government initiatives like the National Energy Bill Relief and Commonwealth Rent Assistance. Programs like these, while helpful, may be masking the true state of inflation.
Job growth itself has a story to tell. The participation rate is up, but it’s partly due to financial stress—more people are being forced into work to keep up with household expenses. On the flip side, youth unemployment is nearing 10%, which is worrying. And while the economy is still growing, the pace is sluggish. For now, the Reserve Bank is taking a cautious approach and wants solid proof that inflation is genuinely under control before they consider cutting rates.
Of course, interest rates are all anyone seems to talk about lately, and now we’ve got another twist: Donald Trump’s return to the political stage. Experts, like Raphael Arndt from the Australian Future Fund, are warning of potential inflation spikes due to geopolitical tensions and the growing US budget deficit. Combine that with a Federal Election at home next year, and 2025 is already shaping up to be full of wildcards. Many economists are now predicting we won’t see any interest rate changes until May 2025 at the earliest.
But it’s not all doom and gloom.
There’s some real positivity in the property market right now. Investor activity is on the rise, with national investor loans jumping by 18.8%. High-growth areas like the Gold Coast are leading the charge, while lower-growth markets are losing investors. The result? A shift in activity but little net growth in rental properties.
The Housing Industry Association’s latest report shows a surge in demand for new homes. Many buyers are feeling confident that rates will either stay steady or start dropping, which is driving a lot of the activity. Building approvals are a standout—Western Australia is up a massive 60.1%, Queensland 24.2%, and South Australia 16.3% compared to the same time last year. Detached homes are leading the way, hitting a two-year high with 9,890 approvals.
Apartments, on the other hand, are still facing challenges. Labor shortages and credit constraints are holding that market back, and recovery isn’t expected until mid-next year. Of course, we’ll all be keeping an eye on any new government policies. They often sound great on the surface but can have unintended consequences that shake things up.
As we edge closer to the end of the year, I’m feeling a mix of excitement and curiosity about what 2025 has in store. Between Trump’s policies potentially shaking the global economy and Australia’s Federal Election, it’s going to be a fascinating year to watch unfold.
On a local level, the Gold Coast summer selling season is already heating up. After four incredible years of price growth, many property owners are seeing this as the perfect time to cash out. I’m especially excited about The Event 2025—it’s shaping up to be another massive success. If you’re thinking about selling, don’t miss out. Bookings for The Event close in just a few weeks, so now’s the time to act.
That’s all from me for now—I’ll check back in a fortnight. Until then, take care and enjoy this magical time of year!
