From news to finance reports, bank updates, all the way to daily conversations with friends and family – everyone is talking about the same thing right now: the surge in inflation and interest rates.
Current inflation in Australia has now reached 6.1%, while Australian economists have forecasted that the RBA will aggressively lift the cash rate to 3.35% by November 2022.
Whilst these rising inflation and interest rates are predicted to negatively affect Australian house prices, we at Upstate have a different view. After all – we’re 100 years young and we’ve seen the Sydney real estate market go through all of its cycles many many times before.
From our extensive experience, we know that there’s still an opportunity to take advantage of this upcoming market and make the most of selling your home, especially in Sydney’s Northern Beaches where there’s a trend of great capital growth and high rental yields.
Read on to learn more!
What’s happening with the Australian property market right now
Interest rates in the country are expected to rise continuously as inflation persists in the coming months.
RBA Deputy Governor, Michele Bullock, has mentioned that this surge in interest rates is likely to impact households’ cash flows and debt service to the extent that housing prices will start to decline.
- CBA sees a 6% decrease in home prices across Australia over the rest of this year with 15% falls in 2023.
- ANZ also predicts a 5% decline in housing prices over the rest of the year and a 10% drop in 2023.
- Meanwhile, NAB forecasts a 2.25% decrease in 2022 before a further 15% correction next year.
Because of these reports, many investors are starting to get a little nervous (understandably) about the potential returns from their properties. With the market being so favourable over the last few years, everyone has become accustomed to hot housing prices – only to be shocked by the recent and sudden shift.
But with Upstate, we say – you don’t have to panic if you know what to do in this type of market.
While we can’t control inflation and interest rates, we can control discussing how the market is impacting you and what to do next. As a longstanding agency that has a century of real estate experience in Sydney, we know how to manage these conditions to best guide people towards property success.
Upstate’s opinion on the rising interest rates and changing property prices
At Upstate, we view these housing price shifts more as market and rate corrections – not a decline. What is actually happening is that property growth is just normalising after the once-in-a-generation property boom that we witnessed throughout 2021.
From the recession of the early 1990s and the Global Financial Crisis in 2008 to the early stages of the pandemic in 2020, Upstate has witnessed the Australian property market weather through countless global economic shocks in the past and thrive once again – and this one isn’t going to be different.
“We’ve already hit the bottom of the property price drop – or rather, the price correction. We will now see it plateau out and then proceed to rise over the next 5 to 10-year period”, says Peter Mosedale, Director of Upstate.
Furthermore, the RBA assures that households are in a good position to cope with the increasing interest rates, meaning the majority are finance-ready and can still afford loans and buy homes.
“I would conclude that, as a whole, households are in a fairly good position. The sector in general has large liquidity buffers. Most households also have substantial equity in their housing assets and lending standards in recent years have been more prudent and built in larger buffers for interest rate increases,” says Michelle Bullock, RBA Deputy Governor.
Sydney’s Northern Beaches remain resilient
The great news is – despite all the turbulence brought on by rising inflation and interest rates, we predict that Sydney’s Northern Beaches won’t be as impacted.
Unlike the rest of the country, our region is expected to continue to see immense growth in property values this year, off the back of last year’s momentum. The lack of new stock in the property market, on top of the ongoing demand from buyers who are looking to upgrade and expand their portfolios all make Sydney’s Northern Beaches a highly sought-after location – and high demand equals high prices.
In fact, Upstate has proof of this as we recorded a 100% auction clearance rate for the week ending 23rd July!
So, if you’re planning to invest in Northern Beaches real estate, we’ve compiled a list of top local suburbs to consider.
Upstate can help navigate the volatile property market
At Upstate, our team is always at your service to help manage the market to help you reach your property goals.
Each of our real estate experts use reliable market research, experience and expertise to determine your best course of action when you’re looking to sell your home.
If you are a buyer looking to purchase your dream property, we can also address your concerns about your borrowing capacity by reviewing different lenders, forecasting repayments and determining the loan you need.
So, whether you’re looking for a sign to sell or you just want to discuss your options as a buyer, talk to us.
We’re skilled, agile, client-focused and tech-savvy – let’s just say we do things differently and it’s all for your benefit. Rest assured that you’re in very capable hands!
Let’s find yourself in a better place.
Our Upstate real estate specialists can make your property goals come true. That’s because we’re a big agency, with the heart and determination of a boutique one.
Speak to your local Upstate team today and we’ll show you the possibilities that earn excellent results. We look forward to chatting with you soon.
The Upstate team
