Housing market heading south, but not in all markets.
It is very difficult at the moment to put a genuine positive spin on the Australian property market. Commentators and economists universally expect housing markets to drop 10-20%, particularly in our two biggest markets, Sydney and Melbourne. Those two markets have already fallen between 6-10 percent with most pundits expecting 2023 to be a tougher than the last year.
Before we throw a blanket over the entire Australian property market, let’s dig a bit deeper than the sensationalist print media, and consider the facts.
Yes, Sydney and Melbourne have fallen, and yes, it looks like 20% isn’t overly pessimistic, however, let’s not forget that selected markets are steady, riding a small amount or falling a small amount.
In Western Australia, and in some parts of Queensland, New South Wales and Victoria, housing markets are holding up well, considering the cases of small levels of growth.
Yields are still solid and rental vacancy rates are at historic levels. In 2021 Sydney and Victoria rose 27% a massive rise given the circumstances. One would expect some sort of pullback.
At the moment, the fly in the ointment is no doubt inflationary pressures and global inflation rates, with the Australian number hitting a 30 year high when last reported.
The RBA has aggressively increased rates since earlier in the year with no end in sight. The US increased rates by 0.75%, and likewise, economists expect that trend to continue.
The message is clear; 2023 will be a challenging year. Cost of living pressures, inflationary pressures and falling house prices will be the focal points of the next twelve months.
It is more important than ever to educate your clients, stay on top of your own finances and play the conservative game until the storm blows over.
Investigate, investigate, investigate. Then invest.