top of page
GET INTOUCH THIS MONTH
  • intouch Magazine

Tick Tock Goes the Property Clock


The Herron Todd White (HTW) Residential Property Report is out, giving buyers some insight into what we can expect over the coming months.

 

According to HTW National Director Kevin Brogan, the residential property market in 2023 is expected to be characterised by a continued reduction in transaction activity and downward pressure on prices for at least the first half of the year.


“The confidence that existed in 2022 due to high household saving ratios has been eroded by increasing interest rates and inflation. Some market segments have shown resilience so far, but it is expected that most will succumb to these combined pressures,” said Kevin.


Of course, you’d have to be living under a rock not to have heard the constant rhetoric about rising interest rates, including the recent review of RBA activities. As a result of nine consecutive rate increases, the cash rate hit 3.35% in February, which is the highest it's been in over ten years.


Rising rates are the single biggest influence on the residential property market, and we’re all wondering when the RBA will put the brakes on and deliver homeowners some respite. It seems likely that the RBA will increase rates once again this month because, although there are reasons to believe that inflation is at its peak, we will need to wait for the first quarter CPI data to confirm this.


“Overall, the signs of slowing activity and decreasing prices in the residential property market and of a slowing in construction cost escalation are indicators that cash rate increases are having some success in bringing inflation down,” said Kevin.


The good news, according to Kevin, is that once inflation and, consequently, interest rates peak, greater certainty and consumer confidence should bring greater stability to the residential property market in the second half of the year.


WHAT'S HAPPENING IN THE HUNTER MARKET (DAVID SIMS – HTW Residential Property Valuer)

The market has seen some weakening over the past three to six months, with the trend set to continue as interest rates and inflation affect the cost of living and the ability to afford current asking prices.


As with any weakening in the market, the higher-value suburbs will be affected more greatly than lower-value suburbs in monetary terms. Mid-range suburbs with the prospect of adding value are the suburbs to watch as the weakening market affects the ability and desire to renovate or extend, however, when the market stabilises, the opportunity to add value will improve.


The Hunter region around the Cessnock, Singleton and Maitland LGAs has a lower value base and generally remains affordable even in a peaking market or a weakening market shortly after a peak. Newcastle and Lake Macquarie LGAs have seen substantial growth over the past two years, with the median house price still increasing compared to the same time in 2022.


The higher-value suburbs are the highest risk in a weakening market due to the likelihood of falling property prices. Although a property purchase should be for the medium or longer term and therefore travelling through several property cycles, some caution should always be shown when purchasing shortly after a peaking market when there are signs of a weakening market and the potential for falling values.


The local regions have seen substantial growth over the past two years, and despite the property cycle entering a weakening phase, the region does not appear to have been affected like the larger cities regarding a potential property value decline. As we progress through the year, a number of factors will come into play and determine which way the next property cycle will go.


If you’d like to stay up to date with property trends in your area, visit www.htw.com.au/month-in-review.

コメント


INT_JUL24_Cover.jpg
Screenshot 2024-06-03 160958.png
Newy Jazz Festival Square Banner.jpg
annie square.png
HISS SQ-APR20.png
Pukara.png
bottom of page