While much will depend on the extent to which inflation slows in coming months – and how that guides the Reserve Bank of Australia’s decision-making on interest rates – market watchers say there are signs the housing market is poised to bounce back.
“We believe that there will be a modest-to-moderate recovery, on the back of the fact we’ll have higher inflation, which in real terms will translate to higher rents, and a peaking in the [RBA’s] cash rate,” said SQM Research founder Louis Christopher.
Increasing rates of migration to Australia, a strong jobs market, and continued rental accommodation shortages will all be important factors in the resurgence, he said.
Terry Ryder, founder of hotspotting.com.au, says Australian property markets will abound with opportunities for buyers in 2023. “Right now, the equation for property investors seeking opportunities is particularly strong,” he said. “Consider these realities: Many markets are less competitive than before, with buyers having the upper hand in negotiations. Vacancies across Australia are the lowest ever recorded. Rents and yields are rising, providing good compensation for rising interest rates.
“That equation – competitive prices, high rental yields and good prospects for growth – represents opportunity for investors who buy strategically.”