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Six things to expect from the Australian property market in 2023
21 November 2022
While the stalling property market and fall in prices have characterised 2022, 2023 will see a return to growth, suggests a prominent buyer’s agent.
Along with a return of growth, Buyers Agency Australia Founder Dragan Dimovski has five other major predictions, including a stabilisation in interest rates – which some experts predict will occur by early next year – and the Sunshine State will be the best performing.
“I have said before that I believe interest rates will stabilise – or fall – around February next year, which will trigger a return of buyers, and with that will come a return to price growth,” Mr Dimovski said.
“I think the market will hit the ground running following the Easter break in April next year, which is when prices will start to tick up.
“We won’t see the crazy price growth experienced over COVID though; it will be more modest moving forward.
“But we will see a return to growth, due largely to the demand and supply equation, as there just isn’t enough housing for everyone, and the shortage will only get worse when we see an increase in migration next year.
“Queensland will see the strongest growth in prices next year due to its ongoing population growth and all it has to offer including with the upcoming Olympics and infrastructure projects.
Dragan Dimovski, Buyers Agency Australia Founder
“In fact, I believe there will be a massive return to property price growth in this state in 2023.”
Six things to expect from the Australian property market in 2023
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Stabilisation in interest rates, or even a fall.
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Buyers will return to the market, along with investors seeking better returns outside of cash.
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Growth in prices will be more modest than what was seen over the recent boom.
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Queensland will be the best-performing state, thanks to strong population growth.
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Brisbane, including the inner city, southwest and northeast, and in regional. Queensland, on the Sunshine Coast and Toowoomba, will all be home to the best-performing property markets.
SQM Research data shows how sharply house prices rose during the pandemic, in comparison to pre-Covid. The national weekly house prices rose from less than $600,000 in late 2019 to over $800,000 by the end of this year.
Strong start in 2022
Mr Dimovski said this year had started strongly before the Reserve Bank began its tightening monetary policy agenda. This led to a fall in confidence and a drop in prices. This has been hard to foresee given the RBA was adamant that the cash rate wouldn’t rise until 2024.
“When we started the year the market was buoyant – even frenetic – with price growth strong in the first part of the year,” he said.
“There weren’t many people that predicted the market would fall like it did, so it has been a surprising year.
“Despite the gloom associated with the market falling, it wasn’t all bad, with many buyers and sellers benefitting from the market conditions this year.
“Those people who had the best run were those who sold in the first few months of 2022 and then picked up a discounted property in the second half of the year, after prices started falling.
“But many buyers have used the market conditions to pick up discounted properties and investors have benefitted from higher rents, which have seen yields rise.”
Investors are likely to increasingly gravitate back towards property, Mr Dimovski added, as better returns from the current savings rates are sought after, while the share market also remains volatile.
“Buyers will, by and large, return to the property market next year in force because confidence will return as interest rates stabilise and people realise the sky isn’t falling,” he said.
“We will once again see strong competition, which will push prices back up.”
