What Lies Ahead For Australian Investors in the Property Market?
The rising rates by the Reserve bank of Australia (RBA) for the first time after 11 years had a great impact on real estate in Australia. While the move was aimed at curbing inflation, it has forced sectors to adjust prices accordingly. The same effect can be seen when it comes to buying property in Sydney.
After the soaring property prices during pandemic times, rates dropped for the first time in April, followed by another dip in May. Real estate prices are expected to further reduce by 8 percent by 2023, predicted ANZ. The falling property rates offer investors a chance to make their bets.
Market For Sydney Apartments
There has never been a better chance for investors to invest in an apartment, with property prices hitting rock bottom. But an explosion of demand and an implicit deficit of units for trade is expected to happen soon as students and immigrants return. It could make properties expensive, spoiling people’s plans to buy property.
The median price in Sydney is $1,410,128 compared to $830,534 for a unit. This considerable difference in the median and apartment prices, combined with rising interest rates, is leading to increased demand for apartments. With the assistance of expert real estate advisors at Quarter Acre, adding a new apartment to your portfolio could get more affordable preferences.
Trends in Sydney Property Market
According to the Australian Bureau of Statistics (ABS), the dwelling approval rate declined in March. Thus, even before the RBA raised the rate in May, a slowdown was visible in the real estate market in earlier months.
The approvals for private sector housing fell by around 3%, and the value of total residential buildings fell by 18.3 percent in March. However, loan commitments rose by 1.6 percent, while the number of new loans to buyers in Sydney rose by 4.2 percent in March. Thus a large drop is visible, especially in Sydney and Melbourne – the first ones to show a decline. The trend may continue for the time being.
What Do First Buyers In Sydney Expect?
Owing to an interest rate hike and demand retardation, Australian buyers expect a gradual cooldown of the real estate market, increasing the woes of low-income earners battling to cover rising rental costs or mortgage payments. There will be a knock-on effect for those in the private rental market where housing is in short supply.
The rising interest rates are indeed enough to keep numerous first-time buyers in Sydney off the real estate market. Numerous construction enterprises are anticipated to come to a halt within months. However, a mix of increased supply and lower demand moved the price trajectory downwards.
Upcoming Opportunities For Investors
An increase in asking rents and renters offering to pay in advance to secure property has put investors in a profitable position as landlords, attracting more investment properties. It provides more confidence to rental market investors, as there will probably be no trouble with tenants and with the low vacancy rate in the market.
Also, with the reopening of the international borders, Australia is expecting to see huge numbers of immigrants, which will increase the demand for rental properties around the country.
Infrastructure expansion, the affordability crisis, and the retrieval of overseas migration will lead to upheld demand for cheaper and middle markets despite the top end exhibiting signs of fall.
Conclusion
Considering all the aspects favoring the real estate market investment, it would be the perfect time for investors to enter the housing market. The rate of property in Sydney and Melbourne has reportedly fallen by around 2.5-3 percent in recent time, and an expected decline of around 9 percent in the next 12 months could offer an even better opportunity to investors. Meanwhile, the rise of 2-6.5 percent in Brisbane, Adelaide, and Perth in 2022 but a decline of 4.5 in 2023, as anticipated by ANZ, could give a further boost to Sydney and Melbourne real estate markets.
Therefore it’s now or never. It’s indeed the best chance to plan to buy property in Sydney. Connect with the best real estate consulting firm, Quarter Acre, to choose the most suitable property that fits your portfolio the best.
If you are looking forward to buying property in Sydney and wondering whether the time is just right for purchase, read to know more about the Australian real estate market before making an investment.
