2023 MARKET PREDICTIONS

Will The Property Market Turn In 2023

BY CHRIS GRAY, CEO, YOUR EMPIRE

If you saw the latest property predictions from Louis Christopher from SQM Research a couple of weeks ago you might be in for a shock. Whilst all the other media reports have been doom and gloom all year, depending on what happens to inflation and interest rates, there could be a very good chance that many of our property markets might be bouncing back next year.

While many of the sceptics will be on their naysayers wagon, if you look back over the last few years, it might be simply a case of history repeating itself. In my May 2022 article I talked about timing the market and how no one was buying in 2018/2019 as we had the credit crunch and Royal Banking Commission. They also didn’t buy in 2020 due to Covid and the banks predicting the market was going to drop 20–30%. It didn’t drop by that much and if anything, temporarily dipped 5-10% in places.

In 2022 the banks predicted it would grow 5-10% and it didn’t, it grew by 20-30%.

It's very similar to now. The banks predicted 2022 would see a 20-30% drop due to rising interest rates and that hasn’t happened. It’s dropped 5-10%. Now there’s predictions of inflation starting to come down, interest rates to rise a bit more and then start falling off in early 2023 and hence the potential turnaround in the property prices.

People don’t think it can turn that quickly but often it does. It’s not so much the financial side, it’s consumer confidence that makes a large part of the change. Many borrowers have managed to keep up with the interest rate rise. Many of them did have spare cash or equity buffers to cope with that change and the lenders had factored in 3% rate rises when assessing their serviceability when they took out the loan years ago.

If you wait and interest rates rise in 2023 your serviceability will go down and you’ll be able to afford less. If prices do rise and you delay, you’ll be able to afford even less again.

Whereas if you can get in in Jan/ Feb and have the buffer to ride any interest rate rises, then you’ll get more for your money and take advantage off every day off the rise.

There is never a guarantee of what the future holds but do you think a unit or a house in the area you’re looking to buy will really be worth less in 10 or 20 years time?

Be very careful making decisions based on one simple summary graph. To get a really good picture of what might happen next year, before you buy, invest just $59.95 and download the full report: https://sqmresearch.com.au/ boombustreport.php