The forecast for 2024 is a slightly rosier one. Sustainability reporting is expected to begin being phased in. Industrial rents still have room to grow.
The Australian real estate market has endured a tempestuous few years following the onset of Covid, witnessing incredible lows and exceptional highs across the board.
Interest rates dipped to 0.1% and stayed there for a while. In May 2022, interest rates began to rise, subsequently soaring month after month. Along with a few pauses, the official cash rate now stands at 4.35%.
Sectors such as retail and office suffered, with WFH impacts and foot traffic falling. Industrial, however, was a standout.
As inflation and interest rate rises slow and the market regains its confidence, what’s in store for 2024?
Seven property market predictions for 2024
According to Knight Frank’s Australian Horizon 2024 report, next year is set to be better for investors, with a focus on assets such as build-to-rent (BTR), student accommodation, and more, along with new requirements on the horizon.
A better year to acquire assets, Tilt to core strategies to drive living sectors expansion, End of the NICE era has important implications for investment strategy, Wide divergence in yield impact depending on perception of risk and rental growth prospects, New sustainability reporting requirements will raise the bar for real estate, Slowdown in office development to create conditions for future shortages of new supply, and Global comparisons show that industrial rents have further to rise. 1. A better year to buy
Next year is looking a bit more promising than the tumultuous past few years. Knight Frank chief economist and report author, Ben Burston, believes the commercial property market can look forward to consolidation and the prospect of recovery in 2024.
“The sustained pressure of higher rates has,