Australia’s top buyer’s advocates today revealed their property outlook for 2023 with many anticipating more buyers to surface in the second half of the year as the property market returns to a ‘new normal’ early in the New Year.
Real Estate Buyers Agents Association (REBAA) president, Cate Bakos, said this year’s eight interest rate hikes and more expected next year, will take some of the energy out of the market despite low stock levels in many capital city centres.
“We anticipate the second half of 2023 will see increased buyer energy as those buyers who have been waiting for the market to bottom will see that our cash rate reaches equilibrium and some level of certainty returns in respect of the RBA,” she said.
“We also envisage that investors will continue to be a new force as they enjoy the growing yields and the tight vacancy rates.
“From a regional perspective, many buyers are sitting in the wings, letting the fear of overpaying outweigh the fear of missing out. Sales are happening slowly and any imperfect listings that are overpriced or needing renovations are simply not selling.”
According to Ms Bakos inner-city ring properties have been less affected by interest rises, with many vendors refusing to discount when they don’t have sell.
“Off market sales are becoming increasingly more commonplace, especially in outlying locations where vendor expectations on price may be at odds with the slowing market,” she said.
REBAA’s outlook for 2023:
Queensland, Melinda Jennison, Streamline Property Buyers
We still have low listing volumes across Brisbane compared to our long-term average. Unless this changes in 2023, we expect prices to remain stable. If interest rates stabilise, it is likely that buyers who have been sitting on the sidelines will return due to improved confidence, and prices may recover. Whilst there are still some headwinds, strong levels of interstate migration and relative affordability continue to underpin demand for quality properties throughout the city.
New South Wales, Michael Ossitt, Strand Property Group
Next year expect to see a flurry of new properties hit the market from mid-January but they will be met with an equally high number of buyers who have been putting off plans until 2023. If owners who bought at the top of the market through 2020/2021 come off very low fixed rates next year, we could see more stressed sales through the second half of the year, but again met with a similar number of buyers. For this reason, we see no further price adjustments downwards, more of a stabilisation and even a small increase for good properties.
Victoria, Mark Errichiello, Master Advocates
Properties that are selling are those that vendors are motivated to exit. Many undesirable property types or locations, drag down the median price. Good houses in good locations have had a bit of a dip with interest rate rises, so there are some good opportunities for those that want to hold on long-term. Prices are still strong for houses and townhouses in inner city suburbs such as Brunswick, Brunswick West, Coburg, Essendon, Ascot Vale and Moonee Ponds. We had a great peak balanced out in some suburbs with properties that have only come back 5-10 per cent since the beginning of this year. Next year we anticipate buyers will bounce back quickly with buying and selling activity when things stabilise.
South Australia, Jess Ellam Property
Consistent demand from buyers with a budget of $500,000 – $800,000 with agents receiving 7-15 offers per property. With the recent interest rate rise, we may see some resistance from buyers and less demand for properties priced over $1million, especially for first home buyers. But overall, South Australia has shown consistent growth across metropolitan Adelaide, and we expect this to continue through 2023.
Australian Capital Territory, Claire Corby, Capital Buyers Agency
Buyer purchasing power and risk averse approach combined with December arrival and buyers tapping out for the year means buyers are thin on the ground and have gone into summer holiday hibernation. We are seeing far less urgency with buyers who have largely transacted on the opportunities in the past few weeks with increased spring supply. We envisage seeing less ‘upgrading’ movement as prices in outer areas are discounted with greater exposure to rate rises and lower comparative income early into the New Year.
Tasmania, Samantha Spilsbury, Buyer’s Agents Tasmania
We are still seeing a lot of ‘sea changers’ purchasing and moving to Tasmania to retire. The stock is low throughout the state and properties are taking 6-8 weeks to sell if priced right which allows buyers more time to be pickier and negotiate better conditions and price with the vendor. Some vendors have high price expectations and will not budge on price and these properties do not sell and end up being removed from the market.
We are having a lot of buyer enquiry from either retirees or young families making the move to Tasmania for the lifestyle, minimal investor enquires in the last six months. We expect stock levels to increase in the New Year.
Regional, Matt Knight, Precium Property
Vendor price expectations are high but buyer expectations are low despite 6-9 per cent falls or less in many markets. A few markets have had 10-15 per cent falls but not all. Coastal markets in general have fallen more than inland regionals. Expecting listings to rise after Christmas. Further rate rises could see more depressed buying and more price falls until rate rises stabilise. High enquiry rates indicate many buyers are sitting on the sidelines.