THE PRACTITIONER'S COMPANION
Tuesday 11 February 2025

Renters and first-time buyers in driving seat

The slowing property market is turning into a win for renters and first-time buyers, according to economists.

2 min read

THE slowing property market is turning into a win for renters and first-time buyers, according to economists.

Declines in asking rents has resulted in some suburbs turning into tenants’ markets.

With migration slowing, they say the heat is seeping out of the market and 2025 is shaping up to be a better year for renters.

Domain’s Nicola Powell said: “Vacancies have increased across all our cities and there are big reductions in the number of potential renters viewing a rental property per listing.

“This tells us that competition is easing between renters and conditions are improving.

“When you layer it with slowing population growth, we’re expecting 2025 to be a much better year for tenants in terms of lower rents or at least slower rental increases.”

PropTrack’s Megan Lieu agrees.

“The moderation in the market is a result of an increase in the number of properties available for rent in recent months,” she said.

It is as “likely due to the return of investors and more first-home buyers choosing to buy instead of rent.”

Investor lending increased by 25.2% from the September 2023 quarter to the September 2024 quarter according to the Australian Bureau of Statistics, while first-home buyer loans increased by 8% over the same period.

She added: “As we look ahead, we expect rents to increase at a more moderate rate this year.

“This growth is anticipated to be notably slower than those observed in prior years, which may ease the burden on renters.”

Ray White chief economist Nerida Conisbee picked upon the positive outlook for first-time buyers, describing market conditions as “particularly good”.

The reasons behind that are that “house prices have slowed, and are in fact declining in many places, there are a wide range of first home buyer incentives at both a national and state level”.

She added: “Interest rates may be high but are expected to come down, potentially as early as February.

“In terms of ease of purchase however, a slower market is easier to buy in as you can take your time to make decisions.

“While a slow market is an easier one to buy in, it is interesting that historically, first home buyers tend to be more active in overheating markets, or when first home buyer incentives are particularly generous.”

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