First of all, can you believe it’s already almost 2023?! Time has certainly flown this year – before we know it, we’ll be into summer and the holiday season.
With 2023 in mind, it begs plenty of questions within the property market – what’s going to change?
Will the housing market crash? Are interest rates going to explode?
With all of the changes we’ve seen in our lives over the last few years, it’s no surprise we all have plenty of questions spinning around in our heads. At the end of the day, it’s safe to say we’re all keen on finding some stability and someone that can give us all the answers.
Rather than bringing out the crystal ball and making some guesses, we’re going to delve into the market and look at what’s ahead based on what the figures and market conditions have to say. So, stick around for our 4 property predictions for 2023.
1. The Property Market will continue to DIP
As we’ve seen over the last few months, purchasing has slowed and the hot property market of 2020 and 2021 has cooled off. According to CoreLogic, aside from Darwin, each of our capital cities recorded a decrease in median dwelling values throughout August.
With interest rates rising, consumer confidence has dropped, leading to a decrease in spending. Despite the interest rate rises being set in place to quell inflation, it hasn’t yet caught up, meaning that the cost of living is still on the rise for all of our everyday things, like fuel and groceries.
So, with these hikes in interest rates, the dip that we’ve seen in the housing market was somewhat inevitable, and it may seem like the start of the end – will prices just keep dropping and dropping? Given the likelihood for rates to keep rising toward the end of the year, there may be more to come, but, as you’ll see a little further on, there’s plenty of hope for the long term.
2. Location is Key
With the market moving out of its bullish phase, it makes it all the more important to look at property in quality locations. The property market, as much as it’s referred to as one simple market, is actually a huge number of markets combined into one – with each town, city and region experiencing different changes in market value.
Finding properties in locations that are trending in the right direction is a great option – don’t be dismayed by the news that the market is going down, because that’s not necessarily the case everywhere. Infrastructure, employment opportunities and supply of new dwellings are great measures of a quality location, and in the long run, plenty of towns and cities have amazing opportunities.
3. Rental Prices UP
Across the country, we’re seeing tremendously low vacancy rates – with the national average sitting at 0.9% in August. This means there are very few rentals available, ensuring that demand for rental properties is going nowhere. With a continual growth in demand, through an increase in international travel and migration, prices will continue to rise as tenants bid for their spot to live in sought after properties.
4. The Market WON’T Crash
Last but certainly not least, Australia’s property market is NOT going to crash.
With this downturn in the market, it can spark fear and uncertainty as to what will happen moving forward. You may have seen or heard from pundits that the market is going to be decimated, falling 30% over the next year or two.
According to experts, including RBA Governor Philip Lowe, and Property Strategist Michael Yardney, the economic factors within Australia far outweigh the prospective impacts of interest rate rises. With supply of new houses at a low, due to a shortage of labour and high costs of building materials, it is likely to carry over the coming years, especially as housing demand continues to rise. Alongside this, strong infrastructural growth across the country, led by announcements of building booms surrounding the Commonwealth and Olympic Games, helps place Australia in a strong position moving forward.
So, despite what you may hear about a doom and gloom property market, it is important to understand that achieving your financial and property goals is all about understanding your unique situation within the long-term market.
Interested in learning more about how we can work alongside you to make the most of your position? Give Rostron Mortgages a call on 1300 70 70 39 – we’d love to help!