How will cost of living pressures affect the property market?
Cost of living pressures are likely to increase in 2024, especially for those who bought a property in the last 3 – 4 years. They will be transitioning from a fixed loan of approximately 2% to a variable loan of around 6%, which will see an increase of almost 50% in repayments for some home owners.
Those who can afford it will stay put. Those who can’t might be forced to sell. In any case, upsizing from an apartment to a house is less likely for this group this year.
However, the good news is two trends are likely to continue:
- The trend of first home buyers purchasing small apartments
- The trend of downsizers moving from a big house to a nice apartment – a large two-bedroom or a three-bedroom apartment in a modern building with a lift
Townhouses will also be in demand, as they’re an affordable step up for those who can’t quite manage to transition into a freestanding home.