Market Insights: When to Pull the Trigger on Your Property Sale (For 2023 & 2024)
Timing can be both everything and nothing when selling your property. But when you get it wrong, it can certainly be everything.
And with how the market is currently performing, there are some important trends to look at that could mean timing is everything when selling your property in the next 12 months.
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Recapping the last 12 months
Remarkably, this robust performance continued despite facing early-year floods, highlighting the market’s resilience. While Sydney and Melbourne experienced price declines, Brisbane still boasts significantly higher prices across the city compared to just a year ago, a reflection of its previous boom.
According to CoreLogic, Brisbane’s dwelling values soared by 42.7% from trough to peak during the Covid period. However, they have since receded by -9.4% from their peak in June 2022. It’s worth noting that Brisbane’s housing market is quite diverse, showing differing trends within its segments.
Taking a closer look at the data reveals a tale of two cities. Freestanding houses near the CBD or in good school zones have seen strong value growth, while apartments, especially in high-rise towers and new off-plan sales, have lagged. Similarly, blue-collar areas and new housing estates have underperformed, likely due to financial strain and job insecurity.
High-rise apartments around Brisbane’s CBD, already facing structural issues pre-Covid, may struggle further as buyers and investors turn away, potentially leading to future decline.
As the market navigates this downturn, quality properties and liveability have taken center stage. Demand for A-grade homes and investment-worthy properties, particularly in attractive lifestyle locales, remains robust, preserving their value.
It might surprise you, but the market is actually growing again
Since reaching its lowest point in February, the national Home Value Index has climbed by 4.1%, bouncing back from a 9.1% drop in April 2022.
CoreLogic’s national Home Value Index shows a gradual recovery, with a 0.7% rise in July. However, the pace has slowed compared to the 1.2% spike in May. The price growth in July marks 6 months of consistent growth. Interestingly, national prices are now higher than they were a year ago, as per PropTrack’s data.
So, while the road has been rocky, there’s a clear upward trajectory in the Australian property market. Resilience shines through as prices rise and the market recovers, showing the strength of our housing landscape.
So interest rates didn’t push prices down?
Property prices have a bunch of drivers. It’s not all about interest rates, believe it or not. People’s wallets are looking plump. Wages went up, and joblessness is super low. That means families can handle higher interest rates and still buy homes.
Consumer confidence and the demand/Supply dance is a bigger picture. Housing demand is soaring right now. Why? There’s a migration boom and international students are back. In the shorter-term period, around half a million extra people are going to need homes in Australia.
Supply is struggling to keep pace with the population. The green light for building new homes is at a 10 year low. The building world is in a tough spot. Rising costs and not enough workers caused some smaller construction companies to crumble. Building expenses have skyrocketed by 25% in two years. Builders are handing these costs to buyers, directly impacting house prices.
When interest rates peak (and we might be there already), and inflation does its thing (which might’ve already happened), folks’ confidence will bounce back.
This sets the stage for a fresh property cycle to kick off.
Does this mean we are ready for a massive price jump right away?
Not quite. Here’s why: Interest rates still play hard to get, and 2023 could see more folks out of work.
While the tango between demand and supply matters, its positive effect might have limits.
So there you go, unraveling the property price puzzle. From booming demand to supply hiccups, these factors shape the ups and downs in the property game.
Have we reached the top of the interest rate rises
Let’s chat about what’s cooking in the world of interest rates. The top four banks have placed their bets on how the cash rate will dance over the next few years. Three out of these four banks think the cash rate has reached its highest point.
But hold on, there’s a twist. Remember, unexpected events like changes in the global economy or local politics could shake things up and make predicting interest rates a bit tricky.
Expert | How High Could The Cash Rate Go? | Cash Rate Peak – When? | What then for rates? |
Bill Evans, Westpac | 4.10% | June 2023 | dropping to 2.60% by the end of 2025 |
Gareth Aird, CBA | 4.10% | June 2023 | dropping to 3.1% by the end of 2024 |
Alan Oster, NAB | 4.35% | November 2023 | dropping to 3.10% by the early 2025 |
Felicity Emmett, ANZ | 4.10% | June 2023 | Then one cut of 0.25% in late 2024 |
Predicting the Australian Housing Market
Curious minds are asking: “With interest rates going up, will the property market crash in 2023?”
Now, those persistent bearish voices keep warning that property markets will collapse. But here’s the thing – they’ve been wrong before and might be again this time.
You might have read predictions that property values will plunge by 20% to 25%. Remember the headline “Property Prices Will Fall 30%” from a respected source? They were talking about the whole Australian property market.
But guess what? Our housing market is proving quite sturdy, which might not be music to that writer’s ears.
Here’s a fact: A drop of this magnitude has never really occurred.
Not during the 1990s recession, not when the global financial crisis hit, and not even during the credit squeeze in 2017-18.
The most severe slide happened between 2017 and 2019 due to credit squeeze and election-related uncertainty. Even then, the drop was 9.9%.
Given our current economy, financial status, and property market situation, there’s no good reason to expect such a massive fall now.
Sure, we’re stepping into the next property cycle phase. But there are challenges and opportunities ahead for our markets to handle.
7 Reasons The Market Is On The Up
1. Smaller Households, Bigger Demand
The Reserve Bank of Australia (RBA) noticed a 1% drop in average household size since early 2020.
This has boosted housing demand, helping balance the lower immigration impact during the pandemic.7
2. Immigrant Rebound
Net immigration soared to 320,000 in 2022, up from 5,940 in 2021. This increased demand for around 125,000 more homes.
2023 expects a strong immigration flow, further adding to housing demand.
3. Rare Empty Rentals
Rental vacancy rates in cities are under 1%.
Low vacancy is pushing up rents, possibly luring more investors into the property market.
4. Government Push
Government initiatives, like land tax choice in New South Wales, are boosting property demand.
5. Listings Dip
Property listings are 25-30% lower than a year ago.
This might aid a bounce-back in property prices.
6. Interest Rate Scenario
Interest rates could be near their highest point, lending support to property prices.
7. Auction Success
Auction clearance rates are on the rise, often matching property price trends.
When Should You Look At Selling?
The definitive stats are found in the following chart:
As you can see Brisbane and the surrounding South East Queensland hubs (Gold Coast, Sunshine Coast, Ipswich) are down by 16.2%. What is also important to note is that NSW and Vic capitals (Sydney & Melbourne) are up by nearly 10%. So as a friend said to me recently:
Just as Day follows Night, and Night follows Day. Brisbane follows Sydney and Melbourne.
Meaning that there’s about to be a big uplift in properties coming to the market. This is great for buyers (like me) who have been desperately hunting for months and have found slim pickings.
But maybe not as great for sellers. The buyer pool isn’t likely to increase by much more than it currently is. Another 10% more properties on the market will give buyers more choice. More optimism for being able to find the perfect house, as opposed to settle for the best of whatever is around.
This translates to less offers, less competition per property and possibly a reduction in pricing. Especially when the media gets wind of an increase in properties and spruiks that it is a buyers market in only the way modern media can these days – with a level of hysteria.
So when should you come to market?
As soon as you can. Right now the stock shortage is creating good competition and great pricing for the top properties on the market. Eventually this will change and the leverage will fall into the buyers hands.
This is not a major problem if you’re buying and selling in the same market. You sell for a little less, you buy for a little less. The changeover costs don’t really change that much.
How can we help?
Sometimes a good agent can help you create a much clearer picture of your path to your next property. Here’s 5 ways we can assist:
1. The “I don’t know where to go next” consultation –
2. The “There’s too much to do to get my house ready for sale” consultation
3. The “I’m a fair way out from selling, what can I do to add value” consultation
4. The “I don’t know the best way to transition from one house to the next” consultation
5. The “market appraisal & strategy session” where we establish base pricing for your property, time frames, marketing strategy.
6. The “List my property now” session, which is the same as the other, but we book everything in and take steps toward getting your property sold. We should be doing this approximately 6 weeks from when you’re intending to go to market, or approximately 3 months from your ideal move out date.
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