A property expert has tipped the property market to rise this year, revealing the ten best suburbs for investors across Australia – but there’s no good news for renters.
James Kirkland has predicted that 2024 will be a year of rising home and rent prices, creating an attractive growth market for savvy buyers but more pain for renters.
The property analyst said buyers should not only look for suburbs with high rental yields, but also look for growth to protect themselves from rising interest rates.
He said suburbs such as Kensington, in Sydney’s east, Carlton and Bulimba in inner Melbourne, in Brisbane’s CBD, fit that criteria and were among his 10 “suburbs to watch” this year.
“In 2024, we expect to see a rise in property prices, fueled by relentless demand for homes outpacing available supply,” said the general manager of sales at Little Real Estate.
James Kirkland, Executive General Manager Sales at Little Real Estate (pictured) has tipped the property market to soar in 2024 and revealed which suburbs we should invest in
While the growth potential will be attractive to many Australians, Mr Kirkland said the same market influences were likely to negatively impact tenants.
“I don’t think the rental crisis shows any signs of slowing down,” he said.
‘For the investor who has had to pay a lot more, if he has a mortgage on his property he has the option to increase the rent depending on the condition he is in.
“And it’s likely that rents will rise.”
Mr Kirkland said his agency’s Top 10 list considered several factors, including access to infrastructure such as schools, shopping and transport.
Homes in these suburbs will generate a higher rental return, but also have a higher price.
The real estate analyst said homebuyers should also look at suburbs that have just undergone or are in the pipeline for infrastructure improvements.
He said prices in the suburbs around Liverpool, in Sydney’s west, have almost doubled in the past decade as the city’s new airport approaches completion.
Mr Kirkland’s forecast that property prices will rise further also takes into account population growth due to increasing migration and housing shortages, which have put “major pressure on prices that are likely to continue”.
“I don’t think this is going away anytime soon,” Kirkland said.
Kensington, in Sydney’s east (pictured) has experienced strong rental income and capital appreciation following strong investment in a suburb with access to the beach and the CBD
Melbourne’s Carlton (pictured) also made the agency’s list of ‘top neighborhoods to watch’ this year, after recording strong rental growth while remaining affordable in 2023.
He said those looking to buy should decide what type of investment property they want to buy and get their finances in order before making an offer.
“You have to know what you want to do, and like any real estate investment it has to be a long-term approach and strategy,” Mr Kirkland said.
‘It’s about getting things straight and understanding what you can borrow and what the investment strategy is. Is it a high return strategy, or is it a capital growth strategy?’
First home buyers looking to invest in the market without much capital need to be extra careful and protect themselves from fluctuating interest rates.
According to Mr Kirkland, this means buying a property with a combination of ‘strong returns and good capital growth’.
While the RBA kept interest rates at 4.35 percent in December, a 12-year high reached in November, economists indicate interest rates will continue to fall throughout the year.