Australian Property Market Outlook

09/03/2023


The australian property market outlook is grim for the year to come according to a new report from PropTrack, with interest rates rising faster than expected and dragging on sales volumes and prices. As a result, the report warns that home buyers will be in for a tough time this year and into 2023.

The RBA cash rate has been rising by 25 basis points to 3.35 per cent, its ninth hike since May last year. The bank has also been raising mortgage rates to dampen inflation and make it easier for borrowers to service their debts.

While the resulting rise in interest costs will be felt throughout the Australian economy, it has an immediate impact on the residential property market. The increased cost of borrowing is leading more homeowners to choose fixed-rate loans, which will reduce their lending capacity and thus the potential for price falls over the short term.

Sydney, Melbourne and Brisbane could face the largest declines in home values over the next few years, according to PropTrack. This is due to the fact that these cities are heavily reliant on borrowed money and will therefore be most impacted by the increase in interest rates, the bank says.

Despite the RBA's efforts to keep prices in check, interest rate increases are affecting the property markets across Australia and will continue to do so. The big four banks, CBA, Westpac, ANZ and NAB are all forecasting house prices to fall -8.0 per cent this year and a further -9.0 per cent in 2023, although this is a relatively low figure by comparison to some of the more pessimistic forecasts.

This is why it is crucial to get granular about your local market and understand the impact of interest rates on your particular suburb and property type. This way, you can ensure that your property remains a sound investment for the future.

If you are thinking about selling your home, you should always ask your Hunter Galloway real estate agent for an accurate market appraisal. This will help you decide if it's the right time to sell your home and whether your asking price is competitive enough to attract buyers.

Even if the property market is feeling uncertain, there are still many opportunities available to buyers and sellers. The key is to stay focused on the underlying trends and not allow your emotions to cloud your judgment.

A strong economy will be one of the key pillars that will support our property markets in the short and long term. Moreover, there is an increase in international immigration that will boost demand for housing.

Ultimately, the Australian property market is not going to crash and if you're looking for an affordable investment that will provide consistent returns over time, then investing in Australian properties should be at the top of your list. In fact, it's an asset class that is likely to outperform most other assets in the long run.

Check out this post that has expounded more on the topic: https://en.wikipedia.org/wiki/Real_estate_business.

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