By Leigh Deledio.
2022 was a year unlike any other for the property market. What should we expect in 2023?
Although we don’t have a crystal ball, market conditions can point us in certain directions.
Housing values
Corelogic’s latest influential publication, Best of the Best, evaluated the nation’s annual property performance and provided an outlook for 2023.
The end of 2022 showed a slowdown in housing value declines suggesting that we may have moved past the peak of capital growth declines. Values registered a -1.0% decrease in November, compared to a -1.6% decrease in August.
Cash rate
Currently, the official cash rate is 3.10 per cent. However, further increases in the rate are anticipated which could result in a resurgence in housing value declines in some areas of the country. Economists and experts from the big four banks anticipate rates to rise to around the mid-3% in the early months of the year and stabilize in the second half of 2023.
Rental demand and availability
The national rental tenancy vacancy rate was 0.96% at the end of 2022, the lowest it has been since 2006.
This very low vacancy rate, which has been sustained for most of 2022, has been driving rental prices up. Investors saw gross rent yields rise nationally from 3.21 per cent in February to 3.71 per cent in November 2022.
As rent prices are expected to keep rising in most Australian cities, with regional areas being most affected, so will rental yields.
Opportunities
Historically low unemployment rates combined with strong rental markets, improving affordability from the point of falling housing values, and the expectation of cash rate stability, may attract not only more investors but first-home buyers into the market.
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This article was published by My Coastal Home.
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