Average house prices rose 22% in 12 months last year.
Greater price increases in regional areas due to ‘work-from-home’ initiatives.
Forecasted 2022 house prices are breaking even.
2023 should see up to a 10% decrease in property prices.
Did you know Australia is in the middle of the third property price boom in its history? After two significant property market booms during the Twentieth Century, this third price surge took many industry experts by surprise.
Expecting to see struggling markets during the pandemic, Australia witnessed a 22% price rise in only 12 months. But, with interest rate rises and the continued expectations at the tip of the RBA, will the Australian housing market begin to slow down?
What has happened to the property market?
The property market across Australia has sky-rocketed! The Government has enticed potential homebuyers with attractive incentives, and some Aussies have a fear of missing out!
The pandemic has resulted in many people buying property outside of busy Capital Cities, and working from home in spacious locations.
This impact has made areas such as Perth and Adelaide hot properties, with prices continuing to show strength. Growth in Western and Southern Australia is currently continuing to boom, rippling across the regional areas.
Interestingly, prices in Capital Cities have bucked the trend. Despite some property price growth last year, rising prices in Sydney have slowed.
Are interest rates rising in Australia?
Interest rates have risen to a 0.35% cash rate, the first increase since 2010. The RBA has tried to maintain low-interest rates across the country even though inflation is rising. However, rising inflation will soon have a detrimental impact on interest rates, as the RBA cannot hold back much longer.
Home loan interest rates are also set to rise to a standard 4% at the end of the year.
Inflation is predicted to reach 4.5% very soon. Food and fuel prices are continuing to climb along with housing prices. The RBA are hedging their bets and hoping that record unemployment rates result in wage increases for many Australians.
What are the property market predictions?
Experts are currently predicting that the market will slow in 2022. Property price growth may only reach 1% towards the end of the year.
A steady decline may be witnessed at the start of 2023, with a 5% to 10% decrease in home prices. However, the outlook for 2024 is forecast to be a price decline of up to 15%. This may result in your property price receding to levels experienced in Australia at the start of 2021.
Will home prices crash in Australia?
Prices will start to fall and may even crash. Some industry experts consider a 15% decrease in property values to be a home price crash. Other leaders in the property market judge a 25% decline in value to signal a pure crash.
Predictions are all subjective, however. After all, not many property experts predicted the pandemic property boom!
Rising interest rates may mean that repayments and living costs become too expensive for some individuals. They may then delay purchasing a property for a while, decreasing demand and resulting in falling home prices.
Should I wait to buy a property in Australia?
Take advantage of the current Government incentives and buy a property today! Broker experts at Lendstreet will help you determine whether you are eligible for the Home Loan Guarantee Scheme. You could pay a deposit as little as 5%, or even 2%!
Waiting to purchase a house may mean that you are buying a home at a higher interest rate and with no discount incentives.
Contact Lendstreet today and discuss which home loan options suit your circumstances!
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Are property prices rising in Australia?
In many areas of Australia, property prices are still rising! The outlier to this trend is in Sydney, where growth is currently minimal.
However, regional areas across Western and Southern Australia are witnessing continuous price increases. This is closing the gap slightly between the previous astronomical house prices traditionally seen in Sydney.
Will house prices fall if interest rates rise?
Yes, house prices will fall if interest rates rise significantly. This is because home loan repayments rise and become unaffordable for many people. Property demand declines, and then property price declines.
Fix a home loan deal now with Lendstreet before interest rates make your repayments unaffordable.
Can I still buy a property if the property market crashes?
You can still buy a property if the property market experiences a crash. A property market crash is when the price of most homes plummets and suffers a significant decline. Property can still be sold and bought, however.
Although, some owners may not wish to sell if they cannot get a good price for their property. You may also find home loan repayments higher than at present due to rising interest rates and inflation.
Buying a property now may mean that you bypass the interest rate and inflation rises, fixing a deal with your Lendstreet broker.
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