Australian property prices are continuing to decline, but the downturn seems to be slowing, judging by the latest CoreLogic figures.
The national downturn began gently in May 2022, accelerated through to August, and has been easing ever since:
May = -0.1% decline in the nation’s median property price.
Jun = -0.6%.
Jul = -1.3%.
Aug = -1.6%.
Sep = -1.4%.
Oct = -1.2%.
Nov = -1.0%.
Dec = -1.1%.
Jan = -1.0%.
The link between property prices and interest rates
Ray White Chief Economist Nerida Conisbee, one of the country’s leading property economists, said “the rate of decline is clearly slowing”, even though it’s too early to call the end of the downturn.
Ms Conisbee also said that while property prices move closely with interest rates, they’re not in perfect alignment.
“Once it became apparent to buyers [in 2022] that the days of ultra-low interest rates were over, price expectations were adjusted downwards. It is likely that house prices will start to stabilise before the cash rate peaks,” she said.
“Some markets are also less sensitive to interest rates. Sydney, Melbourne and Canberra are our most expensive cities and as a result are far more sensitive to the cost of debt. Sydney house prices have now fallen by 10.8% from their peak in February 2022. Compare that to Adelaide where the median is half that of Sydney – prices are down only 1.8% from the peak. Resource capitals Perth and Darwin have seen similarly small declines.”
Why get pre-approval?
If property prices do stop falling during 2023, that means prices could begin rebounding and buyer competition could heat up.
Before you start inspecting properties, I strongly recommend you contact me for a pre-approval. As interest rates have been rising, the average person’s borrowing capacity has been falling, so it’s important you understand how much you can borrow before you bid for a home.
Another reason to reach out is that your borrowing capacity can vary widely from institution to institution. I work with a wide range of lenders, so I can find one that’s suitable for a borrower with your unique financial circumstances.
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