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What we can expect in 2023

Updated: Feb 27, 2023

Happy new year and welcome back to The Newstead Group blog where you are given access to answers for all of your finance related questions.

In this post I asked our brokers to answer a few key questions of what we can expect in 2023 with rising interest rates and unsure property forecasts. If you have any additional questions check out our other past blog posts, stay tuned for those to come, or send in general inquiries to the email below and we shall endeavour to answer your questions.

Property Prices


What did we see last year? from this what can we expect this year in 2023?

Last year we saw an increase in property prices coupled with a major increase in interest rates, essentially, most home buyers were priced out of their goals unless having an extremely strong position. This year, we are already seeing properties coming back on the market at lower prices & rates starting to stabilise slightly. Even though we expect some further increases to come, we are now feeling much more comfortable with the overall financial environment having passed some major hurdles in 2022.


With rising interest rates how is this affecting current property prices? Can we expect prices to drop further this year?

There is merit towards house prices dropping, a lot of figures have been thrown around, but the one that resonates the most is a ~10% dip in property prices.


Can house sellers expect a house price rebound this year?

This is a hard one to answer, none of us are qualified economists in the office, but we personally expect property prices to potentially carry on till 2024 at a slightly reduced rate to what they were in 2022; at least until interest rates stabilise further (or decrease).


Interest Rates


How do rising interest rates affect my borrowing capacity and my purchasing price budget?

Every time interest rates rise; your borrowing capacity will shorten. When assessing loans, we always add a buffer to your loan, which is generally around 3% (to forecast for potential rate rises). Rest assured that your borrowing capacity is a good limitation on predictable risk in future, the goal shouldn't be to borrow 'the most', it should be to borrow what you need.


Can we forecast further hikes in rates issued from the RBA?

There is a lot of speculation on the RBA's position but given continued spending we expect a potential 1-4 rate rises between now & December of 2023. This will all depend on continuing spending & inflation, so even the RBA doesn't know until the figures are provided.


The First Home Buying Market


Is the economic/ property climate still good for first home buyers? Or should they hold off?

The property market right now is great. Last year, it was almost impossible to get through to a real estate agent, and a large volume of listings were sold without a finance clause and at times 'unseen'. Even though we can't provide a clear forecast for what might happen throughout the rest of the year, right now we believe the environment to be a 'buyer's market'. If you were holding off, now could be a good time to dig a little deeper into what might be available.


Are there any incentives in place for first home buyers?

There are still spots left in the First Home Buyer Guarantee scheme and money left for the First Homeowners Grant. First home buyers also have a stamp duty concession that they may be eligible for on their first purchase. The government is still investing strongly in the first home buying space. At this stage, first home buyers have definitely gained more than they have lost over the past few years when it comes to government schemes.


The Commercial Market


Forecast on commercial property returns?

We've noticed some large dips in the commercial property market returns due to inflated interest rate rises, and we still believe there is a bit of catching up on for returns in the commercial sector. With work from home flexibility still in place for most employees, we've noticed significant pressure on this side of the industry.


Getting my foot in the door with investing, is this year a good time to start?

If you're looking to tenant your own commercial property, now is a great time to start. For investors, we would consider speaking with your accountant first, as purchasing a commercial property should be heavily based on your tax position and not just the yield or growth as a stand alone component.



The information in this blog is general in nature and is not suitable for financial advice from accredited professionals. You should consider seeking independent advice that takes into consideration your unique circumstances. If you would like to connect with our fully accredited team of brokers to discuss finance options that consider your personal circumstances, goals and needs, visit our website.


Email Piper with any general enquiries at


piper@thenewsteadgroup.com.au


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