Property Forecast for the Remainder of 2023
Weekly Market Update with Leigh Martinuzzi MPG
There is a feeling that the property market may still crash and new announcements suggesting a high chance of recession don’t help. This creates a lack of confidence for both sellers and buyers who are looking to do something over the next 6 months. However, if we read into some of the national statistics and have a look at what is happening around us locally, perhaps it’s not all doom and gloom. Let’s face it, the media and property experts have been wrong before, and while the remainder of 2023 might be slow I for one don’t think it’s going to be a bad time to buy or sell real estate. I also think we might be in for a bit of a surprise rebounding market in 2024.
The consecutive rate rises over the past 12 months have knocked the wind out of the booming real estate prices. However, prices didn’t crash, they stabilised. And while they are higher than 2 years ago, they are still historically low. This doesn’t mean some mortgage holders won’t feel the pinch to their budgets. For those with a variable rate mortgage, the rate rises over the last 12 months would have seen their monthly repayments rise by $1000 to $1200 per month. Then there is talk of a further rate rise, or maybe two before the end of 2023. If this happens, there might be a few homeowners forced to sell. However, the RBA needs to be very cautious as they don’t want to send the economy into a recession. For this reason, I think many others, are likely to ease back on the rate rises in late 2023 or early 2024. When this happens, we will see more homes come up for sale and the pent-up buyer demand will send the market into a buying frenzy.
This is one key reason why I still think we’ve got more property price growth to happen over the next few years. On top of this, there is a huge shortage of homes coming to the market for sale and international migration is on the rise. Nationally, new listings are down close to 30% month to month, and 23.5% year on year. In Brisbane, new listings are down 31.24% year on year and regional Queensland is down 25.6%. As we head into the winter season, we can expect things to remain quiet. Then I would expect to see more homes coming up for sale during the spring selling season. How well this is received by the market will really depend on where the interest rates sit. Keep in mind that there will still be many cashed-up buyers, buyers that have sold and buyers that are without a mortgage, that are ready to buy and happy to pay the price for the right home. Without lower levels of property available, this will keep prices relatively firm for the remainder of the year. For the past few months, home prices have been rising 0.5% per month which may indicate we could end the year up 4% to 5%.
With some uncertainty with the economy and future rate rises it is good to remain cautious however, I think right now is an ideal time for buyers to purchase as they will have less intense bidding competition. At the end of the year that could all change very swiftly. And for sellers presenting good homes, right now there is very little competition for you to up against. Again, as we head through winter that could all change.
AUCTION CLEARANCE RATES
- Queensland – 40% (184/1133)
- NSW – 66% (903/1600)
- Victoria – 67% (866/1273)
- ACT – 62% (73/126)
- South Australia – 72% (101/333)
- Tasmania – NA (0/169)
- Western Australia – 36% (14/723)
- Northern Territory – NA (1/22)
REVIEW(S) OF THE WEEK
Committed and Determined
Leigh and his team were committed to getting us the result we were after. Right mix of hard working and easy going. – Seller