What is the state of the real estate market now?

Whether you want to sell your house, you're interested in buying a new one or you're just keeping an eye on the real estate market, you may want to know where the industry stands now. As we move into 2023, let's take a closer look at the current housing market.

Interest rates

The Reserve Bank of Australia has increased interest rates, which impacts potential home buyers. The increase has been raising every month for the last five months in a row. In turn, the official cash rate is currently 2.60%, which is a sharp increase from April, when it was 0.1%. Not only does this have a serious effect on the overall Australian economy, but it changes the housing market as well. As Andrew Bell puts it in his Market Wrap, "No question that rising interest rates have played a major part in taking the heat out of the real estate market during the course of 2022."

Mortgage rates

As interest rates increase, mortgages are changing as well in response to that. According to MOZO, which tracks banking products in the region, the variable rate increased to 5.16%, up from 4.97% at the beginning of October. This is why many people recommend getting a fixed interest rate mortgage so that the payments do not have to change too much over time if interest rates hike.

The Australian housing sector

Even with interest rates increasing, some potential house buyers may be a little hesitant to pull the trigger. This could be because they are waiting for the interest rates to slow or for housing prices to drop further. On the other hand, sellers aren't getting as much money for their real estate as they were last year and at the beginning of 2022.

Housing prices

According to CoreLogic, "the national Home Value Index (HVI) recorded a -1.4% decline in September." Many experts say that this decline will slow but may continue as the market reacts to the shock of the high-interest rates.

CoreLogic's research director, Tim Lawless, said, "It's possible we have seen the initial shock of a rapid rise in interest rates pass through the market, and most borrowers and prospective home buyers have now 'priced in' further rate hikes. However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again."

The following regions have seen the most notable reductions in prices since March 2020, according to CoreLogic:

• Sydney's Northern Beaches.
• Adelaide.
• Perth.

In other places, like Queensland, prices are still falling but haven't yet reached pre-pandemic rates. According to Andrew Bell's Market Wrap, "Most people know there is an underlying supply problem, and that will continue to have an underlining strengthening of the market over time, and certainly until there is some meaningful increase in the supply of properties to buy."

Are you ready to learn more about the current marketplace and where you fit into it? Reach out to the experts at Ray White Surfers Paradise.