https://youtube.com/shorts/zkuVelWBt10?feature=shareI had to crop that video out of my January 2023 Market update. To think I’d be talking like that in a market update is just quite funny. Under $800,000 properties are selling fast, and under $700,000 are going berserk. Anything over the first home buyer territory in my area generally has to tick the right boxes for the buyer. It shows the borrowing capacity has taken a real hit, but it also shows that people aren’t silly, they’re buying property knowing that it will turn as soon as the interest rates turn again. We have a little bit more pain, but it will turn around and the investors from interstate and overseas who are researching Brisbane and regional QLD will be buying everything in site for the next few years. If you’re considering buying, and you can afford a couple more hits in interest repayments, do it as you’ll likely not regret it. This is the fastest downturn in history, but no downturn has lasted much further than where we are right now. Market UpdateDespite all the negative press that you might have read in the news about the impact of rate rises, our figures based on buyer inquiry level and feedback have indicated otherwise. We are seeing that the property market remains very active and buyer inquiry is strong, in fact we are seeing multiple offers on most properties that we are selling. The good news is, that even though we are in a changing market where the market has adjusted significantly since the peak (start of 2022), prices at the moment seem to have stabilised and we are no longer seeing any significant price drops for most areas. However, we are still seeing the properties that require renovations or that are not in ideal locations (i.e., on a main road) spending a longer period of time on the market. What is the initial forecast for 2023?After recently reading an article by the ABC, it gave an interesting share and possibility for what is to come this year in terms of rate rises and house prices. Recent inflation figures have come in higher than expected which is not great news as this could almost cement a few more rate rises. There is a possibility by the time you read this letter we could have had another rate rise. Some economists believe that we will see a couple more rates rise that is likely to peak at a cash rate of 3.6% and in the second half of 2023 there is a good chance that the RBA could begin to reserve rate hikes if growth does slow and inflation eases as expected. Potentially if rates begin to decrease, buyers’ abilities to loan will increase and so will their confidence, which is likely to translate into growth in the property market. It is also important to note that the growth we saw from 2020 was unprecedented and we are not likely to see that rate of growth again for a long time. Quick explanation of inflation and rate risesJust a very basic understanding as we often have clients asking us about how inflation and rate rise is connected. In a simple explanation, the reserve bank raises the interest rates to get Australians to spend less, as the more Australians spend the higher the inflation rate becomes and in return the RBA is forced to increase rates where it will directly impact the majority of Australia (via loan repayment) that eventually will reduce spending. The idea behind this is to get inflation to its target rate of 2-3%, whereas currently, it sits at 7.8%.https://youtu.be/AF1rkktCTQ0

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