2023 real estate predictions in review: What Cameron Kusher got right and wrong

Making predictions on the future of the housing market has always been fraught — just ask former Reserve Bank governor Phillip Lowe.

Making predictions on the future of the housing market has always been fraught.

Just ask former Reserve Bank governor Phillip Lowe.

There have been predictions of double-digit declines in house prices this year, along with various punts on where interest rates would peak and what it would mean for the property market.

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So how did 2023 measure up against expert expectations and what’s taken hold in the market at the end of the year? In the first of a two-part series — we look back at what experts said would happen in the property market this year.

CAMERON KUSHER: PropTrack’s director of economic research

Despite expectations home prices would fall this year, the Melbourne housing market saw a rebound in price growth.

So how did home prices turn around despite multiple interest rate rises?

Looking back at 2022, property prices in Melbourne fell 4.7 per cent as interest rates rose and borrowing capacities fell.

The market was also experiencing slowing demand, with inquiry volumes for homes listed for sale on realestate.com.au declining, a significant drop in sales volumes and properties taking longer to sell.

At the same time, the number of new properties listed for sale on realestate.com.au dropped significantly, while total listings were steady compared with the previous year.

All signs were pointing to weaker housing market conditions, and with further interest rate rises expected and many borrowers shifting to much higher variable mortgage rates, we anticipated this weakness to persist.

This was not what happened, and over the first 11 months of 2023, property prices increased by 5.5 per cent.

Cameron Kusher from REA Group

While Melbourne property prices increased by 1.9 per cent, in Sydney, Brisbane and Adelaide prices increased between 8.3 per cent and 9.2 per cent.

But the rate of price growth has moderated as new and total listings have risen significantly, particularly since mid-year.

Although stock for sale has lifted, the volume of inquiries a listing has also risen, indicating the number of people interested in buying properties has increased faster than supply has.

From February onwards, there has been a strong rebound in sales volumes which also highlights improved buyer demand.

The number of days a property remains advertised for sale on realestate.com.au has also reduced, indicating that despite more stock for sale, properties with a compelling price or a vendor willing to adjust the price to market conditions are selling quickly.

This year has seen an almost complete reversal of housing market conditions in 2022, despite interest rates continuing to climb this year.

It highlights that demand for housing remains strong and the housing market has been remarkably resilient in the face of higher interest rates.

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