How will cost of living pressures affect the property market?

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:

  1. The trend of first home buyers purchasing small apartments
  2. 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.

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