We don’t have a crystal ball but here are some of the things that I 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 this 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. 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. 3. Regional population movement to continue (but slow) The pandemic sparked the biggest movement to regional Australia ever recorded. 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. 4. Rental pain to continue Population growth and restrictions to housing supply show up most quickly in the rental market. With population growth accelerating, as well as construction problems continuing to slow down housing supply, rents will keep increasing. One balancing factor will be lower levels of household formation. Moving out of home, or leaving a shared house, will become less likely as rents and the cost of living continue to rise. And one thing we know for sure: no one rings a bell at the top or bottom of a market, so if the time is right, the time is right! If you’re considering a move, buying or selling, give us a call. We look forward to being of service to you in 2023. The Sales Team Ray White Cranbourne WHAT’S HAPPENING IN OUR MARKET?
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