A Snapshot Of The Market and Where It’s Heading & A Crazy Man In A Pink Shower Cap
One of my predictions for the year is that property prices will come back by 5-6% in Brisbane.
If you read the media and follow expert predictions, there are wildly different theories about what the property market may do in 2023.
There’s every chance that interest rates will reach their peak of this cycle and might even come back a little…and if this expectation comes to fruition, there’s a train of thought that this might kickstart the property market into another growth phase.
On the other side of the fence, there’s a thought that the anticipated worldwide recession will finally catch up with Australia and our economy will be drawn into a similar fate.
Those on this side of the fence are predicting our prices will come back to similar figures we saw pre-Covid…and this would mean prices could drop by 20-30% nationally.
I don’t believe we’ll see either of these scenarios play out in Australia and I’ll explain why in a moment.
But first, I’ll give you a snapshot of where the market is right now…and it might surprise you.
Over the past 3 Saturdays, we’ve seen huge numbers in attendance at our open homes (in fact, we’ve had higher open home numbers over each of the last 3 Saturdays than we’ve seen since September last year).
To some degree, this is relatively normal for this time of the year as we’ve noticed that January tends to bring many new buyers into the marketplace that simply weren’t there in December – perhaps families make decisions over the Christmas break about moving for various reasons.
The main difference we’ve seen so far this January is that many of these open attendees are buying…and they’re paying top prices.
Of the 7 sales that my team has made since the start of the year, 6 of them are what we consider to be pretty much on ‘par’ with the prices we were seeing at the top of the market (around 10 months ago).
What is clearly obvious from all of the sales figures coming through is that prices are a little ‘all over the shop’ – there are some prices that are very impressive, but many are much lower than what we would expect to see.
From what we can tell, there are 2 main reasons for this…
1. Many sellers simply cannot find suitable tradespeople to attend to cosmetic improvements or minor structural issues and as such, they are presenting their homes in a mildly sub-standard condition (when compared to how things were over the past few years) …and buyers are more reluctant than ever to purchase properties that need work done to them given the high costs they know they’ll encounter.
2. Without trying to give you a ‘sales pitch’, there’s a direct correlation between the agent and the price achieved. Clearly, some agents are placing pressure on sellers to reduce their prices quickly (and for very large discounts) and there are agents that obviously have good negotiating skills. It’s certainly a time to be very careful with which agent you choose.
Generally speaking, there are still limited numbers of properties coming onto the market and just about every agent I know is declaring that listings are very hard to find right now.
My ‘gut feeling’ is that many are only just starting to feel the effects of a big hike in interest rates and there are clearly plenty of homeowners that are ‘battening down the hatches’ and riding the economic storm of rising interest rates and rapidly increasing costs of living.
As such, I do believe that the number of real estate transactions will be lower than we’ve seen for a number of years.
Because of this, the market will (in my opinion) be reasonably resilient to rising interest rates.
So why the prediction of a 5-6% drop in prices?
As I’ve mentioned in one of my blogs just before Christmas, many Australians (about 25% of all mortgage holders) will be coming off a fixed term loan (which could be anywhere between 2-3%) and onto a variable loan (or even another fixed term loan) of anywhere from 5-8% right now (depending on your circumstances).
A few finance brokers I know are already telling me that some of their clients are being denied a re-finance due to a lack of serviceability.
This will mean that some of these homeowners will have no choice but to sell at some stage in 2023…and won’t have the luxury of refusing offers that aren’t meeting their expectations.
As a result, it’s these sales that will likely bring prices down as the market tends to turn a little more into a buyer’s market than it is now.
In reality, borrowers in default are given plenty of latitude to fight their way out a bleak financial situation (we’ll talk more about this in coming weeks) and this might mean that we’ll see more financial stress in 2024 than we’ll see in 2023.
In summary, there’s one thing that is quite clear to us (especially given our sales results over the past couple of weeks) – If you’re looking to sell sometime this year, now is definitely the best time to make your move.
Next week, we’ll talk a little more about some of my predictions for the coming year (and more succinctly, how a lower number of real estate transactions affect the way real estate agents can handle your sale.
Until then…Happy Listing and Happy Selling
Feature Property Of The Week…
This week’s Feature Property of the Week is 11 Maxwell Place, Cashmere – Situated on a huge 2046m2 allotment in the exclusive ‘Greenwoods’ estate, this fabulous modern residence provides 4 bedrooms plus a study, 3 superb bathrooms (including 2 ensuites) 3 internal living spaces, 3 fabulous outdoor living areas and a near new sparkling mineral-based in-ground swimming pool. Adjoining a nature reserve and tucked right at the end of the peacefully quiet cul-de-sac, you’ll love the serenity and seclusion that exudes from every room. New to the market and already attracting solid interest, make sure you prioritise this one before another astute buyer snaps it up.
Exclusive Family Residence Adjoining Nature Reserve on a Huge 2046m2 Allotment
Insights Article…
With NSW introducing a new ‘Land Tax’ system as an alternative to paying Stamp Duty (for First home buyers), there’s been speculation about whether other Australian States and Territories will follow suit. At this point, it appears as though it’s not on the cards as this article explains…
Click Here To Read Article
Did You Know…
Michael, Lilliana and Julie played a little game of ‘dare’ last Sunday. The bought each other an item of clothing at a ‘discount store’ and the dare was that they each had to wear it through the shopping centre at Strathpine as they shopped. Michael certainly looked ‘lovely’ in his shower cap complete with a pink ribbon. He said passing shoppers would either look the other way (thinking he was a raving lunatic and wanting to avoid going anywhere near him) or would state “nice hat mate” with a laugh. So if you were at Strathpine Shopping centre last Sunday morning and saw a grown man wandering around with a spotted pink shower cap, it was indeed Michael.
Michael has now been involved in more than 2500 sales and his experience extends from project marketing (off-the-plan) sales to commercial, industrial and residential sales. His first 6 years in real estate were dedicated to inner and fringe city apartments and in 2006, he found his way back into the local Albany Creek market (he grew up nearby in Everton Hills). Since then, he’s made more sales in the local area than any other agent.
