TOP PREDICTIONS FOR 2023 FOR AUSTRALIAN RESIDENTIAL MARKETS
We don ’ t have a crystal ball but here are some of the things that we think will happen in residential property markets in 2023 .
1 . Interest rates to peak
We ’ re yet to see the peak of interest rates but at this point , it ’ s likely to happen early next year . Conditions can of course change quickly however , as of writing , fuel prices have pulled back , supply chain blockages are improving and most recently , we saw inflation pull back slightly . With interest rates rising so rapidly , we ’ ll start to see rising unemployment next year and this is likely to result in interest rates coming back down later in 2023 .
2 . House price growth to start again
House price data from Neoval , a new property analytics company backed by the White family , has already recorded house prices stabilising across Australia . While this may just be a temporary reprieve , at some point , increasing population growth and a shortage of homes will lead to price pressures that will overtake higher interest rates . Already this is showing up in rental levels . With interest rates starting to stabilise , it will also result in house price growth starting up again .
3 . Beach house opportunities
Holiday homes were hot property during the pandemic . Interest rates were low , many of us could work anywhere and we were restricted to holidaying close to home . Interest rates are increasing , many employers want people back in the office at least some of the time and international borders are back open . Add to this growing shortages of long term rentals in many regional beachside locations . This is leading to a crackdown on vacant holiday homes . All of this is likely to lead to more holiday homes on the market .
4 . Regional population movement to continue ( but slow )
The pandemic sparked the biggest movement to regional Australia ever recorded . While we won ’ t know for sure until later next year , it ’ s likely that this movement has now slowed considerably , however it ’ s unlikely to have ended . The main reason for this is that population movement was already occurring prior to 2020 , driven by affordability and improvements to transport links to regional areas . This trend will continue and will particularly benefit those areas close to capital cities that offer high levels of amenity .
5 . Apartment living to become more popular
Inner city living wasn ’ t much fun during the pandemic . Much of what makes it great such as great restaurants and entertainment were not available . In addition , living in small places is more problematic when you need to work and study there every day . As a result , we saw record movement to regional areas and very high demand for bigger homes . This is now starting to change back as we move on from pandemic restrictions . Rents are rising again in many inner city apartment markets and pricing will follow from this , further fueled by much lower levels of new development .
6