Navigating the Australian property market over the past year has felt like standing on shifting sands.What’s happening in the market? Will Australian house prices crash? But is the market starting to regain stability? And if so, what can you do now to make sure you’re ready to buy?
Anyone with an eye on the property and finance market over the past few years has seen their fair share of thrills and spills. It’s been anything but uneventful.
But with the RBA’s rapid-fire rate hikes slated to peak in 2023, is there a property upswing afoot?
Westpac’s economists seem to think so – they’re predicting that the housing correction is winding down. The bank forecasts that Australian property prices will grow by 5% in 2024 after stabilising throughout 2023.
So this week we’ve looked into data from some of Australia’s leading property market and finance institutions.
Suggested Reading: Median House Prices in Australia in the Last 50 Years
The big four banks’ cash rate predictions
The RBA has raised the cash rate an eye-watering 11 times in 12 months, with the official rate reaching 3.85% in May 2023.
Understandably, this has made some would-be buyers gun-shy when it comes to pulling the trigger on applying for a home loan and buying a house.
But Australia’s four major banks have tipped that 2023/2024 could see the cash rate start to decline. Here’s what they’re each predicting:
Commonwealth Bank: peak of 3.85% reached, and will drop to 2.60% by August 2024.
Westpac: peak of 3.85% reached, and will drop to 2.10% by May 2025.
NAB: peak of 3.85% reached, and will drop again in 2024.
ANZ: peak of 4.10% by August 2023, then will drop to 3.85% by November 2024.
So, whichever financial institution you choose to listen to, it looks like we’ve either reached the cash rate peak, or are very close to it. And what goes up must (hopefully) come down.
Property prices are back on the move
In 2022 we saw national property prices take a small, but not insignificant, hit.
In response, sellers started waiting it out for a better price, creating a slim-pickings situation for house hunters.
However, Property Investment Professionals of Australia (PIPA) chair Nicola McDougall has stated that property prices look to be stabilising, partly due to the low volume of housing stock for sale.
Meanwhile, CoreLogic data shows that the three months to April marked the first quarterly boost to national property values since this time last year, with a 1% rise.
Why is this good news if you’re looking to buy? Well, hopefully you’ll soon have more suitable housing options to choose from as owners start to list again.
And with interest rates predicted to decline in 2023/2024, getting prepared now could put you in good stead to buy when the time is right.
Message Soho Home Loans today
With all the above in mind, getting your pre-approved finance in place now could have you primed to pounce on your ideal home ahead of the next property market upswing.
And if you don’t think your deposit is quite there just yet, keep in mind that a new round of the federal government’s low deposit, no lenders mortgage schemes are set to become available from July 1, which can help first home buyers, regional buyers and single parents crack the market 5-years sooner, on average.
If you’d like to find out more, get in touch with Soho Home Loans today and we can run you through your options and help arrange your finances.
More on the property market rebound of 2023
What is the property market forecast for Brisbane in 2023?
The property market in Brisbane is expected to decline by 12% in 2023, following a modest rise of 1% in 2022. The expected median house price in 2023 is $719,669.
Brisbane’s property market is expected to decline due to a number of factors, including rising interest rates, a slowdown in population growth, and a decrease in investor demand.
Will Perth house prices drop in 2023?
According to REIWA, the property market in Perth is expected to remain steady in the first half of 2023, while rent prices will continue to increase. They are forecasting an 11.5 per cent lift in rents through 2023 – after a 10 per cent jump last year – equating to a $10 billion increase in household rent bills.
Perth’s property market is expected to remain steady due to a strong economy and a growing population. However, rent prices are expected to continue to increase due to a shortage of rental properties.
Are house prices dropping in Canberra?
Indeed, property prices in Canberra have witnessed a notable decline from their peak achieved during the June 2022 period.
The city’s current median reflects a decrease of 10.9 percent since then, resulting in a significant drop of $127,472. This indicates a shift in the Canberra property market dynamics, creating potential opportunities for buyers looking to invest in Canberra’s real estate sector.
What is the shock housing boom predicted?
There are a few reasons why some experts are predicting a shock housing boom in 2023.
- Interest rates are expected to remain low. The Reserve Bank of Australia (RBA) has raised interest rates several times in recent months in an attempt to curb inflation. However, many economists believe that the RBA will not raise rates much further, as they do not want to risk derailing the economic recovery. This means that mortgage rates will remain relatively low, which will make it easier for people to buy homes.
- The population is growing. Australia’s population is growing at a rate of around 1.5% per year. This means that there is a growing demand for housing, which is likely to push up prices.
- The economy is strong. The Australian economy is growing at a healthy pace, and unemployment is low. This means that people have more money to spend, which is likely to boost demand for housing.
Of course, it is important to remember that these are just predictions. There are a number of factors that could derail the housing market, such as a rise in interest rates or a recession. However, if the conditions remain favorable, then it is possible that we could see a shock housing boom in 2023.
Here are some of the factors that could derail the housing market:
- Rising interest rates. If the RBA raises interest rates too quickly, it could make it more difficult for people to afford homes, which could lead to a decline in demand.
- A recession. If the Australian economy enters a recession, it could lead to job losses and a decline in incomes, which could also lead to a decline in demand for homes.
- Government intervention. The government could introduce policies that cool the housing market, such as stricter lending rules or taxes on property speculation.
It is important to note that these are just some of the factors that could derail the housing market. The actual outcome will depend on a number of factors, including the global economic climate and the policies of the Australian government.
