After the RBA’s most aggressive tightening cycle in over 30 years, top experts surveyed by The Australian Financial Review predict only two further rate hikes in 2023 as the RBA pauses to evaluate the effects of the fixed-rate mortgage cliff.
According to CoreLogic’s records dating back to 1980, Australia has experienced the worst property downturn in history, with the average dwelling price dropping by 8.4% between April 2022 and Jan 2023.
However, Domain’s chief of economics and research, Dr Nicola Powell, says that even though we are likely to see a further decline in 2023, it will not erase all the pandemic price growth.
Property Tribune’s Kate Hill says that demand is expected to continue to exceed supply. This is partially driven by the immigration surge, with overseas property searches increasing in 2022 by 65% from the previous year.
After the largest annual price increase on record of 11.9%, the Cordell Construction Cost Index (CCCI) shows signs of easing, with the last quarter of 2022 recording only 1.9% growth.
The decreased affordability caused by the rate hikes has forced Australians to forgo sole home ownership. NAB’s research shows 40% of Australians are considering purchasing property with people other than their intimate partner.
Download and read the full Market Essentials – February 2023 Report.