The next property boom could start as soon as mid-2023 according to experts.
Ayre Real Estate’s Directors Adrian Wilson and Craig Donohue have predicted that buyers should look to get into the market now ahead of a market turnaround when interest rates begin to fall.
The Sydney city prestige apartment specialists said during the next boom apartments will likely outpace houses due to the general cost of entry, location to amenities, and the desire to be back in the harbour city.
Mr Wilson said he expected the Reserve Bank of Australia (RBA) to start to slow down its interest rate rises.
“There is definitely a high potential for a few more rate rises before we see a quick handbrake and U-turn, with a possible softening of rates, if not stabilisation by mid-2023,” Mr Wilson said.
“Once this happens the market will kick into gear at a fast pace.
“Buyers who are currently standing on the sidelines will be kicking themselves for not taking the plunge by this time next year.”
Mr Wilson said he expected supply to remain tight for the foreseeable future.
“We’re also expecting the current lack of stock to remain until spring next year, with a slight elevation in listings likely to come onto the market in the first quarter,” he said.
Mr Donohue said first home buyers would likely have an easier time entering the market when stamp duty changes are put into place.
“We’re also predicting the change to stamp duty will naturally make it easier for first-home buyers to purchase,” Mr Donohue said.
“The savings on upfront stamp duty at the outset should offset the current stress of higher interest rates and give buyers more confidence to purchase in the current market.
“This should also drive stronger interest in the apartment market where we expect to also see rents continue to increase next year.”
When it comes to rentals, Mr Wilson and Mr Donohue said the market would continue to increase and stock levels would remain low.
The interest rate rises will also spur investors to chase higher returns, and with return to the office on the agenda, especially in the CBD, they expect city apartments to outperform the market.