Holding a crystal ball and predicting the property market’s future makes each of us a fortune teller
The property market has weakened since the sharp increase in interest rates, and the anticipation of more rate increases this year.
Despite the doom and gloom, I do not believe the market will crash.
I am not an economist but a real estate agent who has lived and experienced the 1990s recession, the global financial crisis and the credit squeeze in 2017-18.
However, market has transitioned to a falling market, reversing some of the $2 trillion extraordinary capital growth in 2021. This price correction will directly affect those who purchased in the past two years and need to sell.
We will see a normal market where buyers and sellers can negotiate.
In a normal property market, you sell before you buy, whereas, in the buoyant market we’ve had, you would buy before you sold, fuelling competition which resulted in price inflation.
The price correction is not across all markets, with an auction clearance rate of between 55 and 65 per cent, which indicates a normal market with properties remaining unsold for longer.
We’re already seeing lower auction clearance and a sharp price drop in one and two-bedroom apartments, but on the flip side, there is strong demand for oversize 3-bedroom luxury apartments in Bellevue Hill, Darling Point, Double, Bay and Rose Bay.
Potential sellers need to understand that we are now in a different market, and we need to be cautious with inflated estimates and empty promises.
