Australian property market outlook 2024

The RBA’s decision to raise rates today was a balance between fighting inflation and maintaining credibility. Particularly for a new governor. We had been warned by the RBA for the past few months that decisions would be data dependant and that data over recent weeks has been pointing in one direction — sticky inflation.

I go through these points and others in the video. If you don’t have time to watch, my points are:

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• The RBA has raised interest rates by 25 basis points, a move reflecting the Australian economy's resilience, particularly in the face of strong job and housing market data.

• Despite interest rate increases, the employment market remains robust, underpinning the strength of the property market and continuing to support rising house prices.

• Inflation is still a concern with higher than expected figures, but strong retail sales indicate a healthy consumer spending climate.

• The banking sector is showing signs of stability with reports of record profits and low levels of loan delinquency, suggesting an overall strong economic structure.

• Future real estate investments should focus on income-generating properties in prime locations to balance the higher cost of funding with the potential for long-term value growth.

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I suspect there could be another 25 basis point move in the coming months if the data continues in the current trend, before a slowdown and pivot somewhere in mid 2024.

But the bottom line is this — the economy is strong, jobs are abundant and the housing market in Australia has weathered the storm perfectly well. The RBA had no other choice.

Peter Esho is an economist and Founder of Esho Group. He has 20 years of experience in investments and markets.