Market Outlook 2023
According to CoreLogic’s Best of the Best 2022 Australia Report, the housing market trends in 2023 will largely be shaped by monetary policy and the housing lending environment. The expectation of a peak in inflation and interest rates this year could mark a bottoming out in price falls. On the other hand, the expiry of fixed rate terms, and the surpassing of service ability assessment buffers, pose a test to mortgage service ability. Aside from monetary policy, migration and rental trends could also see a lift in investor and first home buyer activity as housing values find a floor.
In 2022 Nationally, gross rent yields rose 50 basis points from 3.21% in February to 3.71% in November. This presents investors with a potential opportunity. With yields expected to continue to recover throughout 2023 and values expected to find a trough, prospective investors could be positioned to take advantage of both high rental income and capital gains. First home buyer decisions may also be triggered by ongoing pressure in the rental market in 2023, and the potential for housing prices to reach a trough over the year. According to the Westpac-Melbourne
Institute consumer sentiment report, the ‘time to buy a dwelling’ component of the index rose by 2.4% over December 2022. This could indicate that the initial fear of buying in a downturn is starting to stabilise, with some buyers hoping to take advantage of their position at the negotiating table.
Market Overview 2022
