It’s been an unusual start to 2023. What started very slow has picked up somewhat in recent weeks. Agents are reporting many more people attending open homes and more buyers than there were in December and January. There is still a lack of stock, but some properties are being snapped up quickly and for excellent prices.
We’re finding renovated homes are still going for a premium and houses under $1m, first home buyer territory, are still selling well.
According to the Newcastle Herald, house prices in Newcastle were down 10% in the nine months until January this year, but prices are still well above pre-COVID levels. The city’s house values remain 32 percent higher than pre-COVID levels, compared with only 11.7 percent across Australia’s state and territory capitals. So, overall, Newcastle is faring much better than much of the rest of the nation.
Latest figures from property analysts CoreLogic show the typical Newcastle and Lake Macquarie house value was $823,000 in December, down from $919,000 in April.
The rental market is still incredibly strong with low vacancy rates. Some experts believe rental accommodation demand will continue to outstrip supply as first-home buyers are restricted by higher interest rates and surging migrant numbers seeking homes.
So, what’s likely to be in store for the rest of the year?
According to the latest analysis from PropTrack, national property prices are expected to decline between 7% and 10% in 2023. Prices are forecast to decline across all capital cities in 2023, with the largest falls expected in Sydney (-8% to -11%), Brisbane (-8% to -11%), Canberra (-8% to -11%), Melbourne (-7% to -10%), and Hobart (-7% to -10%).
This forecast is based on a prediction that the cash rate will rise a further 50 basis points from its current level (3.1%) and then remain on hold throughout 2023. If interest rates are hiked a further 50 basis points, borrowing capacities would be down by around 30%.
Property experts are cautiously optimistic that in 2023, as interest rates plateau, the market will stabilise.
First-home buyers are likely to return to the market first, buoyed by some of the first-home buyer incentives currently available.
“I think once we see some certainty surrounding interest rates and provided the cash rate does stabilize at the 4% mark, then I think we will see more first-time buyers in the marketplace in 2023 and then followed by investors,” SQM Research owner and managing director, Louis Christopher says.
Domain’s chief of economics and research Dr. Nicola Powell concurs, “I believe that by the end of this year we’ll be talking about property prices moving into a recovery. You know, we’re expecting interest rates to hit a peak some point this year, and it’s likely the RBA will start cutting them again. And I think that we’re going to see a similar thing in the property market. I think what we’ll see is a stabilisation of prices sometime this year, later on in the year, and we will start to see prices moving to a recovery towards the end of the year.”
– Forbes Advisor (
The last time we saw a market like this was after the GFC. Some properties are still selling for over-market value and others are wallowing for a long time on the market. The best way to get a good buy currently is to watch the market carefully over some time, track properties from start to finish, be patient, and do your due diligence.