Greetings to you all.
Last year brought its fair share of tribulations into our lives.
War, epidemics, rising inflation, cost of living pressures, home loan interest rate changes, floods and yet we made it through. We are a resilient bunch.
We have transitioned out of two years of real estate boom in which prices grew at the fastest and largest rate in the history of Australia, and then we saw the market move into the next phase which always is price correction.
The interest rates have increased by a total of 3% in just one year. This hasn’t happened seen since 1994 when interest rates went up by 2.75% in a 12 month period. The consequences of higher interest rates have bigger impacts on markets throughout Australia. First home buyers are truly feeling it first, as do all of those who bought over the past two years unless they were downsizing retirees.
Whilst most of the country has already experienced around a 15% drop in property prices the Gold Coast to date has been very fortunate. In the 20 years I’ve been in real estate the Gold Coast has always had its own unique property market, very different to other locations in Australia.
Inflation is still at the highest point in 30 years and the ongoing supply chain and labour shortages have caused building costs to rise substantially.
The continued movement of the population has seen greater growth in the regions than the capital cities for the first time in four decades according to the latest information from ABS. People have changed their lifestyle mainly due to the pandemic. This in turn has changed the property market dynamic over the past couple of years.
Property prices have skyrocketed in certain areas and now we are in the most rapid property market correction I have ever seen. In a time-frame of property growth that would have normally taken 5 – 10 years it has now happened in the short space of only 2 years.
Being realistic, interest rates couldn’t stay that low forever. However, we are still well away from the historical average of around 7% for home loan rates and the general consensus is that the reserve bank may not increase them much further during the course of 2023. That would bring some relief to mortgage holders at least.
Property values have fallen in some areas this year, as you’d expect following the unexpected pandemic boom. Below is the latest CoreLogic data showing house price movements from January 1 to November 30.
Median house prices movements: Jan 1 – Nov 30, 2022
- Sydney -11.9%
- Regional NSW -1.5%
- Melbourne -8.1%
- Regional VIC -0.7%
- Brisbane -0.8%
- Regional QLD +2.1%
- Canberra -3.5%
- Adelaide +10.2%
- Regional SA +17.1%
- Hobart -4.7%
- Regional TAS +3.5%
- Perth +3.7%
- Regional WA +5%
- Darwin +5.2%
- Regional NT +1.6%
I think that by April – May of 2023 we will see a more stable market across the country. South-east Queensland will still be an area of comparatively strong demand given its popularity with sea changers relocating here because they can work from home and have a great lifestyle, great climate and be close to the beach. Who wouldn’t want that kind of lifestyle ?
Future growth drivers for the Gold Coast remain strong, such as:
- 10 years of pre-Olympics infrastructure projects that attract large companies providing job opportunities.
- Interest from overseas investors. Rental increases of over 10%
- Migrants and ex-pats returning to Australia that prefer to live on the coast.
- Large companies relocating to South East Queensland providing work opportunities
- More tourists choosing to holiday on the Gold Coast due to overseas travel disruptions and uncertainty regarding covid
When does the selling season start in 2023?
Once the holidays are over and the kids are back at school is usually the best time for launching your property to the market. Buyers are refreshed and ready to buy. Sellers have time to present their properties ready for the market. Remember the three most important aspects of getting the best result – Price – Presentation – Marketing.
If you’re thinking of buying, don’t worry about trying to time the market. No one can pick the top or bottom as it can change quickly from month to month.
If you really like a property that should be what motivates you. Just remember whatever you pay today is going to be cheap in 5 to 10 years’ time. This rings true particularly on the Gold Coast. Just get the location right and keep within your budget.
I do feel a great sense of enthusiasm in 2023 and I hope it brings you good fortune and good health! Take care.
