Sydney real estate: Six reasons why house prices could rise again in 2023
There are six big reasons why house prices should start to go up again in 2023 after a year of big falls.
The Sydney property market could be on the cusp of recovery after a year of falling house prices.
Data expert Arjun Paliwal has tipped property prices to rise as soon as April next year as a rental crisis and changes to stamp duty push more first home buyers into action.
The founder and head of data for buyers agency InvestorKit said limited housing would combine with an increase in demand to push up sales prices as more buyers entered the market.
There were 236,000 listings for sale across the country as of October – roughly the same level as March 2010 when the population was 4 million less than current levels.
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“We are seeing roughly the same amount of listings for sale as 12 years ago, which is concerning,” Mr Paliwal said.
“This supply and demand is what will ultimately drive up house prices.”
He said the next round of tax cuts, along with the removal of stamp duty for first home buyers in NSW could improve the borrowing capacity of some purchasers while the rising cost of rent could prompt more people to consider buying while prices are down.
He said property downturns typically didn’t last as long as upswings or flat periods, and that prices had consistently been falling for close to a year.
“There comes a point in time where people do see value,” he said.
“I feel that point in time will be next year.”
Mr Paliwal said interest rates could soon hold steady while the 3 per cent assessment buffer used by banks could potentially be wound back, enabling more borrowers to pull the trigger on their purchases.
“I feel the biggest increases (in interest rates) are possibly behind us, especially as we saw the trend of increases change from 0.5 down to 0.25,” he said.
While he tipped prices to rise 5-8 per cent in Sydney next year, he said a further softening before this was likely.
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Originally published as Sydney real estate: Six reasons why house prices could rise again in 2023
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