An Australian property expert has warned property prices will soar due to several factors explaining a potential new boom.
Niro Thambipillay, a Sydney-based investor and buyer agent, predicts the price spike will occur in 2024.
He believes that this rise will be triggered by the third phase of tax cuts which will coincide with an expected drop in interest rates.
Interest rates were suspended by the Reserve Bank of Australia for a second consecutive month in August, but remain at their highest level in 11 years, at 4.1 percent.
Many commentators expect it to start falling in the coming months after climbing 12 times since May 2022.
The third stage of tax cuts, which will take effect on July 1, 2024, will mean that anyone earning more than $50,000 will have extra money in their pocket.
An Australian property expert says property prices are set to skyrocket due to several factors sparking a potential new boom.
Australian property prices have risen over the past six months and are expected to continue to do so.
Mr Thambipillay said this would mean more people would have extra cash to invest in areas such as the property market.
He claimed that lower interest rates and lower taxes would convince banks to lend more money, including for home loans.
“You have increased borrowing capacity through tax cuts, you have increased borrowing capacity through potential interest rate cuts, you don’t have enough supply right now to meet the existing and still growing demand and property prices have already gone up.’ Mr Thambipillay said in a TikTok video.
“What do you think will happen from the second half of next year?
“I think in many areas, not all of them, but in many areas, house prices are going to start going up very quickly and that’s why I think right now, if you can afford it, now is the best time to get into investment property.”
Mr. Thambipillay said recent house price increases have already proven the resilience of the property market.
Nationally, home prices rose 2.3% in the first six months of 2023, following declines in the second half of 2022.
PropTrack predicts this trend will continue, with strong price increases likely in Sydney, Melbourne, Adelaide and Perth this year and more modest returns next year.
Property prices have risen in Sydney for the sixth consecutive month despite rising interest rates due to record immigration, making it difficult for first-time homebuyers to enter the property market.
In the market for Australia’s most expensive capital, the median rose another 1 percent to an even more unaffordable high of $1,333,985 in July, according to data from CoreLogic.
In other major capitals, house prices started to rise again in March.
House prices in Melbourne have risen for five consecutive months, rising another 0.3 per cent in July to $923,881.
In Brisbane, property prices rose another 1.4 percent last month, to $819,832.
Niro Thambipillay, a Sydney-based investor and buyer’s agent, predicts that a spike in property prices will be triggered by the third round of tax cuts.
Perth values rose 1 per cent to $625,969.
The recovery in Adelaide began in April, but monthly increases since then have been larger, with prices in July rising another 1.4 per cent to $722,793.
Prices in Darwin rose for the third straight month in July, rising 0.5 percent to $583,913.
Mr. Thambipillay was a real estate investor before becoming a buyer’s agent.
In 2002 he bought an investment property in Western Australia after deciding against buying in Sydney based on his own research.
He claimed to have doubled his money in just 18 months.
Even though Mr. Thambipillay’s clip has been viewed 296,000 times, not everyone agreed with his conclusions.
One commenter said he would not invest in Australian property due to economic trends in China.
“Local numbers don’t mean anything,” he said. “China’s supply chain is on the verge of collapse,” he said, predicting it could lead to a recession.
The creation of a new 30 per cent tax bracket as part of the third stage of the cuts, for Australians earning between $45,000 and $200,000 a year, means middle, middle and high earners will benefit.
Those with $80,000 would recoup $875 with their tax returns for the 2024-25 fiscal year compared to 2023-24 and 2022-23.
Mr Thambipillay believes property prices will rise “very rapidly” in some areas in the second half of 2024.
Australians with $60,000 – a level slightly below the average income of $65,000 – get $375 back.
But higher earners will fare much better, with those earning $120,000 getting back $1,875.
Those with $200,000 will receive a very generous $9,075.
The main change in the third stage of the tax cuts is that the number of tax brackets will be reduced from five to four on July 1, 2024 for the first time since 1984.
Other people who responded to Mr Thambipillay’s TikTok thought the money made from the tax cuts would be better spent elsewhere than in the property market.
“I’d rather give up a tax cut and get dental coverage through Medicare,” one said.
