In the Westpac-Melbourne Institute Consumer Sentiment Index, the 'Time to buy a dwelling index' rose 1.6% over the past month, scoring 74.3.
This is still very weak by historical standards (the long term average is 121.1), but prior to December's monetary policy decision, the index was just 65.3, rising to 78.2 the following fortnight, an increase of nearly 20%.
The RBA decision not to raise rates in December has seemingly boosted buyer confidence that interest rates may have peaked, and with two thirds of consumers expecting property prices to increase further over the next year, some might see opportunity in the coming months.
Property price growth throughout 2023 was already strong, with prices hitting record highs in November according to the CoreLogic Home Value Index, although Melbourne and Sydney seem to have plateaued recently.
While rising interest rates likely hurt demand, a chronic undersupply of listings kept growth strong, particularly in Brisbane, Perth and Adelaide, where the pace of growth has yet to slow.
Improving buyer sentiment would likely boost demand, and keep upward pressure on prices, but Senior Westpac Economist Matthew Hassan is wary of concluding that 2024 will see an flurry of buyers hit the market.
"The main picture [is] still one of extreme tensions between stretched affordability and positive price expectations," he said.
For CoreLogic Research Director Tim Lawless, declining affordability is shifting demand away from the expensive end of the market, which might explain why the Sydney and Melbourne markets have stagnated.
"As borrowing capacity reduces, we may be seeing more demand deflected towards lower housing price points, with the broad middle of the market now recording the strongest rate of growth in Sydney and Melbourne," he said.
Supply to also increase?
At the same time, the market might be more balanced in 2024, with signs the number of properties available to buy is increasing, according to Domain.
October '23 saw the highest number of new listings across all capital cities since May '22, and while that number declined slightly in November, it was still the second highest of the year.
Total supply is at the highest point in 20 months in Melbourne, 12 months in Adelaide, 8 months in Hobart and 5 months in Brisbane and Perth, while there haven't been this many properties up for sale in Canberra since early 2020.
Supply throughout 2023 was well below average levels, which many attributed to sellers holding out while prices were low after the dip during the second half of 2022, but this is seemingly improving now prices are climbing back up.
More properties might also come to the market from an upcoming investor exodus, with a survey from mortgage broker Resolve Finance suggesting 19% of investors intend to sell in 2024.
Debt free home ownership a fading dream
For plenty of Aussies, buying property is a path to long term financial security, but new research from AMP Bank suggests these days, fewer older Australians than ever before are looking at owning their home outright by the time they retire.
Almost 9 out of 10 Aussies aged over 50 believe they will still be paying off a mortgage when they retire, while about a third are not confident their nest egg, be it investments, superannuation or pension funds, will provide for the lifestyle they want.
ABS data suggests average household debt for those over 55 has quadrupled in less than two decades, from $62,000 in the 2004 financial year compared to $242,000 in '22.
More than half of those responded are willing to change their lifestyle to save more money in retirement.
AMP Director of Retirement Ben Hillier says raising retiree debt presents an "evolving challenge" in financial planning for retirement.
"Rising retiree debt needs to be acknowledged as an issue by industry, Government and regulators so that we can work together to provide Australians with greater financial confidence in their retirement," he said.