5 Predictions For the Sydney Property Market in 2023

While sellers might be hoping for prices to rebound, buyers are hoping for the opposite. So, what can Sydneysiders expect from the property market in 2023? Nationally, buyers and sellers can expect a steep drop in house prices and experts don't expect them to recover until sometime in 2024.

That might sound like great news for buyers, but the reality is that rising interest rates have also weakened their ability to borrow. Even if interest rates were to drop or steady, there are still higher interest rates to contend with than normal which is putting a lot of pressure on potential buyers, especially for those looking to enter the market for the first time.

Here are five predictions to be on the lookout for.

• A Tale of Two Halves 

While experts don't expect Australia as a nation to recover until 2024, it might be a different story for Sydneysiders.

In the first half of 2023, home prices are going to continue to fall. The market is suffering for a variety of reasons and until the interest rates start to come down, we can't expect to see much change in housing prices. We're in a precarious situation – buyers need to borrow to buy and high-interest rates are making that more challenging than ever before. This is compounded by rising costs, which means it's difficult to save a deposit with the cost of living so high.

• There Are Still Buyers

Despite the financial landscape, there are still buyers out there who are looking to get on the property ladder or take a further step up the ladder. Financial approval is still possible for the right borrowers and the downturn in house prices is going to be an attractive prospect for a lot of people. That won't change. This will be further bolstered by returning immigrants, as well as jobs rebounding.

• Discerning Buyers

After COVID-19 we experienced a property boom that felt like it might last forever. A lot of people assessed their priorities during lockdowns and decided to make major changes, whether it was about a sea or tree change or finding a property with more garden space. There is still demand for property, but buyers are more discerning now.

There has also been a lot of familial strife because of the pandemic, which means that people who have separated, divorced, or had children are looking to move on to a more appropriate home. Ultimately, people will pay more to find the right house in the right neighbourhood and that's going to be the overarching search category for a lot of people.

• Rising Rental Prices

Vacancy rates are dropping nationwide, but Sydney is particularly tight. That isn't expected to change any time soon, but because the demand for rentals is so high and there are so few available, you can expect to see a steep rise in rental prices. This will only become more challenging as foreign students and workers return to the area.

• Investment Opportunities Continue

This shouldn't come as a surprise considering the previous point, but it's clear that investors will keep purchasing. Of course, there are benefits and cons to this. Investors will expand the rental possibilities and may contribute to lower rental prices. However, they are most likely to squeeze first-home buyers out of the market as a result.

If you are planning to purchase a home this year (or next), you should seek out the services of the best mortgage broker Sydney. You want to find an expert with local knowledge who can do the legwork to find you the best possible home loan available for you and your individual circumstances.