Investors are falling short of safeguards as the Australian housing market goes through a radical decline in the pricing of houses. The pandemic induced a COVID housing boom in Australia in 2021, and housing prices soared by unbelievable margins. However, the downturn in Australia’s property market started in early 2022 as prices in certain suburbs declined by huge margins from the peak levels. Some of the regions reached pre-pandemic levels of house and unit prices while creating uncertainties about the future of the property market. The following post attempts to offer insights into the possible trends investors can expect in the Australian property market in 2023.
The Effect of Market Downturn
The prices of houses and units in Australian suburbs have been falling rapidly in resonance with the market downturn trends. Sydney and Melbourne have noticed the most evident decline in house and unit prices back to the values before March 2020.
The notable inner-city suburbs of Sydney experienced a notable decline in average house prices since the pandemic. Darlinghurst and Surry Hills registered the biggest declines at 13.7% and 12.8%, respectively.
On the other hand, Melbourne also registered some of the largest declines in house prices in 2022. Suburbs such as Windsor showed a price decline in the range of 14.1%, while St. Kilda and South Melbourne experienced 12.4%.
What Does the Housing Market Hold for You in 2023?
Research and predictions are the only sources of identifying any positive signals for the Australian housing market in 2023. As of now, most of the estimates point to the possibility of the downturn extending further in the next year. Economists have suggested that housing prices could decline further in 2023 in the range of 15% to 20%.
Investors or first-time buyers can seek declining house prices as a viable investment opportunity. However, the low cost of housing comes at the hidden cost of higher mortgage payments. When you have to pay more interest on the mortgage to purchase a property, you are more likely to skip the option. As a matter of fact, many potential buyers had to encounter limitations on the maximum amount they could borrow for housing.
When Will Things Get Better for Australian Housing Market?
The downturn of the Australian property market appears as the result of the hikes in interest rates by the RBA. On top of it, the RBA has been cautious with its aggressive policy of hiking interest rates. How can you find the ideal approach for investments in such turbulent times? Reach out to professional property investment experts and unravel the ideal route to navigate uncertain property market conditions.
