Rask - Chris Bates & Pete Wargent's property predictions for 2025
The discussion highlights the unexpected resilience of the Australian property market in 2024, despite high interest rates. Key insights include significant growth in Perth and Brisbane, driven by low stock listings and high population growth. The market's resilience is attributed to factors like inherited wealth and a shortage of listings, particularly in premium markets. Despite predictions of increased mortgage stress, the market has remained stable, with investor lending rising by 30% over the year. Challenges for developers were noted, with construction costs and insolvencies reaching record highs. Looking ahead to 2025, potential interest rate cuts and changes in lending conditions could provide a tailwind for the market. The discussion also touches on the impact of government policies, immigration, and global economic factors on the property market. The podcast concludes with personal reflections on market strategies and the importance of planning and budgeting for property investments.
Key Points:
- Australian property market showed resilience in 2024 despite high interest rates.
- Perth and Brisbane experienced significant growth due to low stock and high population growth.
- Investor lending increased by 30% despite high rates, indicating strong market interest.
- Developers faced challenges with high construction costs and record insolvencies.
- Potential interest rate cuts and changes in lending conditions could boost the market in 2025.
Details:
1. 🎙️ Welcome and Essential Disclaimers
- The information provided is limited to general financial information only.
- Listeners are advised to consult with their financial planner for personalized advice.
- A financial services guide is available for reference.
2. 📢 Introduction to the Australian Property Podcast
- The podcast features Pete Waren from Alan Wen Property Buyers and Chris Bates, Australia's number one mortgage broker, who provide expert insights into the Australian property market.
- Listeners can expect engaging discussions and valuable strategies related to property buying, investment, and mortgage insights in Australia.
- The introduction sets a positive and engaging tone, aiming to educate and inform listeners about the dynamic aspects of the property market.
- The podcast is designed to cater to both seasoned investors and newcomers, offering practical advice and up-to-date market trends.
3. 🔮 Market Review: 2024 in Retrospect and 2025 Forecasts
3.1. Market Review 2024
3.2. Forecast for 2025
4. 🏠 Property Market Dynamics and Trends of 2024
- The real estate market is experiencing a period of adjustment and new norms, with anticipations for significant shifts in 2024 driven by both economic and social factors.
- Economic aspects such as interest rate fluctuations and employment rates are expected to significantly impact property values and market activity.
- Social factors, including demographic changes and urbanization trends, are influencing buyer preferences and property demands.
- Seasonal shifts in market activity, such as increased sales in spring and summer, continue to affect property dynamics.
- Strategic insights suggest focusing on areas with growing employment opportunities and infrastructure development for potential investment.
- Projections for 2024 indicate a balanced market with moderate price increases, influenced by stable economic growth and changing buyer demographics.
5. 📊 Insights on Market Fluctuations and Housing Demand
- Perth experienced a 20% growth despite interest rates above 6%, with some areas performing even better, particularly in gentrified neighborhoods.
- The medium and lower-end housing markets outperformed the high-end due to high interest rates pushing budgets down.
- Investor lending increased by 30% over the year despite higher interest rates, showing resilience in the market.
- Median days on the market remained stable at around 30-40 days, indicating a tight market despite high rates.
- Total listings remained low, even though there were more listings in the second half of the year compared to the first half.
- Developer insolvencies hit a record high of about 3,000 due to overruns in fixed-price projects and high construction costs.
- Building approvals were at their lowest in 12 years during a period of high housing demand, indicating a supply issue.
- Investor activity in Western Australia and Queensland showed significant growth, with investor lending doubling in WA since 2020.
- Melbourne's market has struggled with confidence and affordability, but business investment in Victoria has picked up recently.
- Interest rates are expected to stabilize around 3.5% with potential rate cuts and easing of lending conditions anticipated.
- Rental prices increased by 40% since the start of the pandemic, and structural under-supply of dwellings continues.
- Potential changes in immigration policy could impact population growth and housing demand in 2025.
6. 🔧 Renovation Trends and Development Hurdles
6.1. Renovation Trends
6.2. Development Hurdles
7. 📚 Reflections and Lessons from a Resilient Market
- The year was characterized by resilience, with significant learning about intergenerational wealth management and the development market.
- People are remaining in their homes longer due to structural changes, impacting market dynamics.
- Interest rate changes do not directly translate to housing price changes, showcasing complex interdependencies.
- Market reactions to conditions are not always predictable based on past trends, highlighting the need for adaptive strategies.
- Sentiment and market confidence can shift rapidly, as observed in September, where rate expectations and buyer confidence surged.
- Potential FOMO (Fear of Missing Out) can drive sudden market booms, indicating a volatile but opportunistic environment.
- Monitoring Melbourne's market response is crucial, as it may serve as a bellwether for broader trends.
8. 🌍 Global Influences and Personal Resolutions
8.1. Insights on Personal Development and Investment
8.2. Personal Goals and Health Management
9. 🎊 Conclusion and Future Outlook
- The challenge of setting boundaries between technology and personal life is significant, particularly for self-employed individuals, highlighting the ease of justifying constant work-related activities.
- There is a crucial need for clear boundaries between work and leisure time for business owners to maintain a healthy work-life balance.
- The introduction of iPads for children is aimed at managing and limiting screen time effectively, illustrating a common family challenge in balancing technology use.
- Future plans for 2025 include significant business and leisure activities, indicating a strategic approach to both personal and professional development.
- Active audience engagement is encouraged through listener questions and suggestions for interviewees, demonstrating a commitment to interactive content.