More than seven in ten (71%) real estate professionals expect interest rates to have the most significant influence on the housing market in 2024, according to a new survey by leading property data and analytics provider, CoreLogic.
'Decoding 2024: Real estate's trends and goals revealed' survey from CoreLogic delves into insights of more than 1,400 real estate professionals to uncover their 2024 outlook for the economic landscape, housing market and their business goals.
The 71% of respondents who named fluctuations in interest rates as the primary driver of the Australian real estate market in 2024, were comprised of nearly three in five (59%) who strongly believe rising rates will have the most significant impact, while 12% anticipate falling rates to make waves to some degree.
Despite these expected fluctuations in interest rates, the majority of survey respondents conveyed a positive sentiment toward the overall economy in 2024, with 57% expecting some economic growth, while a similar number (59%) tip home values to rise this year.
At the local level, low housing stock was identified by two in five (41%) respondents as the most significant stressor on their agency for the year ahead, while 38% stated high interest rates and inflation as their main concern.
CoreLogic Head of Residential Research Australia - Eliza Owen, said the survey results are relatively in line with where housing market performance is currently forecast by the major banks.
"The broad expectation for housing values in 2024 is that the market will still grow but at a slower rate than the 8.1% observed in CoreLogic's Home Value Index in 2023," Ms Owen said.
"Growth in housing demand is expected to slow amid higher cost of living pressures, a higher tax take from bracket creep, and high interest rates. This means less savings to put toward housing purchases - indeed the latest national accounts data from the ABS showed the household savings ratio had fallen to its lowest level since 2007. Consumer sentiment remained very low at the start of 2024, which can also signal households being hesitant to make high-cost, high-commitment decisions."
"Despite some of the headwinds for market demand, growth is still expected to be positive throughout 2024. Ongoing constraints in the construction sector are likely to keep a floor under home values, with the number of completions trending lower throughout 2023. "
"There remains a strong mismatch in the supply and demand of dwellings across Australia, and anything that makes buying more accessible, such as a reduction in interest rates, would likely boost buyer numbers. With inflation currently trending just below RBA forecasts, the case for a cash rate reduction is firming up in 2024.” Ms Owen said.
CoreLogic General Manager - Real Estate Solutions, Dirk Miller, said there is mixed sentiment among the industry regarding the impact of current economic conditions on their business outlook for 2024.
“Our survey respondents from across the real estate industry indicate confidence about house price increases and 2024 economic growth stimulating business in the long run, despite having strong concerns about interest rate fluctuations shaping this year’s market."
"The results also found low levels of stock and deepening customer relationships are also weighing on their minds. This will make smart prospecting, maximising the untapped potential of their databases and building a stronger brand pivotal to success through 2024 and beyond,” Mr Miller said.
Additional key findings:
Climbing house prices. Nearly half (46%) of respondents anticipate a rise in house prices this year of between 1-5%, while a further 13% expect an increase of more than 5%. One quarter (25%) believe prices will stay steady, with the remaining 16% predicting house price falls in 2024.
Confidence in 2024 economy. Nearly three in five (57%) respondents report a positive sentiment towards the overall Australian economy and expect business to benefit from some economic growth in 2024.
Deepening customer relationships. In pursuit of business goals in 2024, four in five (80%) recognise the importance of increasing face-to-face interactions with customers for success. The top strategy for driving new business in 2024 chosen by nearly half (49%) of respondents was to nurture their CRM database through emails, SMS and calls. More than two-thirds (67%) of respondents acknowledged better utilising their CRM data is a priority in 2024.
Increasing marketing presence. Stronger brand building was high priority behind nurturing their customer databases, with three in five (61%) respondents planning to focus efforts to enhance their digital and social performance in 2024. This drive for improvement is particularly significant considering that 69% are currently managing social media marketing in-house or through a hybrid model.
*The survey respondents are a combination of customers across CoreLogic's real estate products and industry peers subscribed to CoreLogic communications. A full sample size of up to 1435 was collected, fielded from December 2023 to January 2024.