"Only time will tell the future of property in Australia, but here are a few predictions made from a buyer's agent." - Mitch Connolly, Senior Investment Analyst.
While 2022 has been characterised by a stalling of the property market and a fall in property prices, 2023 will be defined by a return to growth, according to Buyers Agency Australia Founder Dragan Dimovski.
While 2022 has been characterised by a stalling of the property market and a fall in property prices, 2023 will be defined by a return to growth, according to Buyers Agency Australia Founder Dragan Dimovski.
This is one of Mr Dimovski’s six major predictions for the property market in 2023, with his five other expectations being that:
- There will be a stabilisation or fall in interest rates, expected to occur around February;
- Buyers will return to the market in force, including investors looking for better returns outside cash;
- Growth in prices will be more modest than we have seen over the recent boom;
- The best performing state for property will be Queensland, largely due to its strong population growth;
- The best performing property will be houses in Brisbane, including in the inner city, southwest and northeast, and in regional Queensland, on the Sunshine Coast and Toowoomba.
“I have said before that I believe interest rates will stabilise – or fall – around February next year, which will trigger a return of buyers, and with that will come a return to price growth,” Mr Dimovski said.
“I think the market will hit the ground running following the Easter break in April next year, which is when prices will start to tick up.
“We won’t see the crazy price growth experienced over COVID though; it will be more modest moving forward.
“But we will see a return to growth, due largely to the demand and supply equation, as there just isn’t enough housing for everyone, and the shortage will only get worse when we see an increase in migration next year.
“Queensland will see the strongest growth in prices next year due to its ongoing population growth and all it has to offer including with the upcoming Olympics and infrastructure projects.
“In fact, I believe there will be a massive return to property price growth in this state in 2023.”
Mr Dimovski said 2022 had started strongly before interest rate rises led to a fall in confidence and a resultant drop in prices, which had been hard to foresee given the RBA had indicated the cash rate would not rise until 2024.
“When we started the year the market was buoyant - even frenetic - with price growth strong in the first part of the year,” he said.
“There weren’t many people that predicted the market would fall like it did, so it has been a surprising year.
“Despite the gloom associated with the market falling, it wasn’t all bad, with many buyers and sellers benefitting from the market conditions this year.
“Those people who had the best run were those who sold in the first few months of 2022 and then picked up a discounted property in the second half of the year, after prices started falling.
“But many buyers have used the market conditions to pick up discounted properties and investors have benefitted from higher rents, which have seen yields rise.”
Next year, Mr Dimovski said, investors would increasingly gravitate back towards property looking for better returns than the current savings rates in particular, with the share market also volatile.
“Buyers will, by and large, return to the property market next year in force because confidence will return as interest rates stabilise and people realise the sky isn’t falling,” he said.
“We will once again see strong competition, which will push prices back up.”
Source: The Real Estate Conversation