The top 7 trends for 2024 borrowers

After a turbulent 12 months, 2024 is shaping up to be another challenging year for Aussies looking to obtain a mortgage and those already servicing one. Despite 12 rate rises, inflation remains stubborn and isn’t expected to fall to the RBA’s intended range of 2-3% until 2025. Parts of the housing market remain as robust as ever, with prices for standalone homes steadily increasing due to fierce competition and low stock levels.

This scarcity of housing combined with a construction industry in distress are major factors that are pushing more first home buyers into making the jump. However, tightened lending means these buyers are more restricted in their options than they were a few years ago.

With that in mind, here are some of the key trends to watch for in the mortgage industry in 2024:

First home buyers head for the fringes

Sydney’s property market continues to soar to new heights, with house and unit prices growing further out of reach for most first home buyers. Even with a healthy budget of $800,000 – the price cap for buyers taking advantage of the government’s first home loan deposit scheme – buyers are priced out of most of Sydney’s suburbs. Currently figures show the median price of a unit in Sydney is $817,059 while median house prices sit at an eye-watering $1,333,985. To stay within budget, first home buyers would need to search for properties on the city’s fringes on the west, south-west and as far as the Blue Mountains.

First homebuyers may have to consider properties on the city fringes. Image: Getty

Singles are being hit hard

Singles in Sydney are facing formidable challenges when it comes to entering the property market. For the most part, property prices in Sydney show no sign of falling which presents a major barrier for those on a single income. Limited housing affordability coupled with stringent lending criteria and the high cost of living further compounds the issue.

Many singles find themselves struggling to save for a substantial deposit, and even with the Federal government’s first home loan deposit scheme and the NSW government’s waiving of stamp duty among other concessions, buying property as a single is still difficult thanks to most properties exceeding the price cap for government assistance.

Female homeowners on the rise

The rise of female homeownership reflects the country’s rapidly changing economic and social dynamics. According to census data, 35% of all households in NSW are single households. Single parent households have reached unprecedented highs. Empowered by increased financial independence and the growing emphasis on gender equality, women are no longer solely reliant on men when it comes to property ownership. CoreLogic reports that women currently own 26.8% of Australian property, with 35.7% of apartments in the hands of female owners.

Divorce trends also play a role in this change as women increasingly have the means and motivation to buy out their male partner’s share in marital property settlements. Additionally, more women are pursuing homeownership independently, heralding a broader transformation of the property market as greater numbers of women aspire to invest in real estate.

Second marriages’ effect on home ownership

Second marriages often bring complex issues regarding home ownership, especially when safeguarding assets is a priority. For individuals entering into second marriages, protecting investments or previous family homes for their existing children is a major consideration. In these cases, it’s common for couples to keep ownership of such properties separate to ensure they are inherited by their respective children rather than being factored into the new marital union.

When it comes to purchasing new marital homes, couples often enter the property market with clear financial agreements in place. These agreements ensure that the financial contributions of both partners are explicitly recognised, adequately reflect the financial realities and priorities of their second union and ensure that the new home is equitably shared. In the context of mortgages and property ownership, the importance of effective financial planning and communication when blending households in second marriages can’t be understated.

Appetite for new builds remains dampened

The appetite for new builds in Australia continues to be subdued primarily due to a variety of factors that have left many prospective homeowners cautious about embarking on new construction projects. With construction companies folding left, right, and centre, potential homeowners are understandably apprehensive about building their new home.

With uncertain timelines, cost overruns due to the rising price of building materials, and labour shortages to contend with, many Aussies are instead opting for existing properties or considering alternative measures like renovating as a more secure and predictable pathway to homeownership.

Residential construction rates will remain low in 2024.

Cash is king

Whether they accumulated cash through savings during the pandemic or are sitting on extra dough through the sales of investment properties, an increasing number of Australians are poised to buy into the market in cash. Data shows that 1 in 4 property purchases in Australia’s three most populous states are cash purchases.

Undeterred by high interest rates, these buyers are a formidable force in the property market. Consisting of downsizing Boomers and international buyers, this cohort could potentially price out buyers who rely on mortgage financing, intensifying competition for the most desirable properties and possibly driving property prices even higher.

Mortgage sideliners

A growing group of individuals often referred to as “mortgage sideliners” are sitting in the wings for longer and longer as they await more favourable market conditions. For these potential homebuyers the increasing unaffordability of homes coupled with tighter lending requirements is a major barrier to entry. Mortgage sideliners hope for a market correction and for interest rates to fall before making their move. While they continue to monitor the market for the right opportunity, mortgage sideliners risk the current market spiralling even further out of reach as a low interest rate period is sure to spark more competition for desirable properties.

Two Red Shoes founder Rebecca Jarrett-Dalton

Rebecca Jarrett-Dalton is founder of mortgage broker, Two Red Shoes

There are Corvette fans for whom the base US$68,300 car is plenty powerful enough. After all, it produces 495 horsepower and can reach 60 miles per hour in 2.9 seconds. But hold on, there’s also the approximately US$115,000 Z06—with 670 horsepower and able to reach 60 in 2.6 seconds. These split seconds are important for busy people—and for marketing claims. And if that’s not enough go power, there’s the even more formidable 900-horsepower ZR1 version of the Corvette, starting around US$150,000. The hybrid E-Ray, at US$104,900, is pretty potent, too.

But if they’re still too slow, fans of American-engineered muscle can consider the exclusive Texas-built Hennessey Venom F5, a limited-edition carbon-fibre hypercar. Ten years ago, the Hennessey became the world’s fastest production car, defeating the Bugatti Veyron Super Sport, with a top speed of 270.49 miles per hour.

That world title is much sought after, and is currently held by the Sweden-built 1,600-horsepower Koenigsegg Jesko Absolut, with a two-way average top speed of 277.8 mph. But Hennessey is still very much a contender. The company is hoping the 1,817-horsepower F5 (with 1,192 pound-feet of torque) can exceed 300 mph on the track this year.

The Hennessey Venom F5 coupe is sold out, despite a more than $2 million price tag.
Hennessey photo

Hennessey’s previous Venom GT model (introduced in 2010) was based on the Lotus Exige, with a GM LS-based engine, and was built by partner Delta Motorsport. Spokesman Jon Visscher tells Penta , “The new Venom F5, revealed in 2020, is a 100%bespoke creation—unique to Hennessey and featuring a Hennessey-designed 6.6-litre twin-turbo V8 engine boasting 1,817 horsepower, making it the world’s most powerful combustion-engine production car.” Leaps in performance like this tend to be pricey.

This is a very exclusive automobile, priced around US$2.5 million for the coupe, and US$3 million for the F5 Roadster announced in 2023. Only 30 Roadsters will be built, with a removable carbon-fiber roof. The 24 F5 coupes were spoken for in 2021, but if you really want one you could find a used example—or go topless. In a statement to Penta , company founder and CEO John Hennessey said that while the coupe “is now sold out, a handful of build slots remain for our Roadster and [track-focused] Revolution models.”

Only 24 Revolutions will be built in coupe form, priced at US$2.7 million. There’s also a rarefied roadster version of the Revolution, with just 12 to be built.

The Venom F5 Roadster has a removable carbon-fibre roof.
Hennessey photo

The Venom F5 coupe weighs only 3,000 pounds, and it’s not surprising that insane speeds are possible when combined with a hand-built motor (nicknamed “Fury”) created with power uppermost. The V8 in the F5, installed in a rear mid-engine configuration, has a custom engine block and lightweight forged aluminium pistons, billet-steel crankshaft, and forged-steel connecting rods. Twin turbochargers are featured. The F5 can reach 62 mph in less than three seconds, but top speed seems to be its claim to fame.

The driver shifts the rear-wheel-drive car via a seven-speed, single-clutch transmission with paddle shifters. The interior is not as spartan or as tight as in many other supercars, and is able to handle very tall people. The butterfly doors lift up for access.

“With 22 customer Venom F5 hypercars already delivered to customers around the world, and a newly expanded engineering team, we’re focusing the Venom F5 on delivering on its potential,” Hennessey says. “Breaking 300 mph in two directions is the goal we aim to achieve toward the end of this year to claim the ‘world’s fastest production car’ title.”

Hennessey says the car and team are ready. “Now the search is on for a runway or public road with a sufficiently long straight to allow our 1,817-horsepower, twin-turbo V8 monster to accelerate beyond 300 mph and return to zero safely.” The very competitive Hennessey said the track-focused Revolution version of the F5 set a fastest production car lap around Texas’ 3.41-mile Circuit of the Americas track in March, going almost seven seconds faster than a McLaren P1.

The Revolution features a roof-mounted central air scoop (to deliver cool air to the engine bay), a full-width rear carbon wing, larger front splitter and rear diffuser, tweaked suspension, and engine cooling. It’s got the same powertrain as the standard cars, but is enhanced to stay planted at otherworldly speeds.