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Prices To Rise in 2023

There is a growing chorus of reputable real estate analysts who are forecasting that residential property prices will rise in 2023.

In contrast to the predictions of economists working for the big banks and other institutions, specialist real estate researchers see prices growing in the year ahead.

No one is forecasting price rises like we saw in 2021, when the national average was an increase above 25%.

Rather, most credible analysts are suggesting price growth that could be described as solid or moderate.

That’s certainly how we see it at Hotspotting.

And we note that a growing number of well-credentialled analysts have similar views.

Experienced research professional Louis Christopher of SQM Research recently published his annual Boom and Bust report, in which he stated, as his base case scenario, house price rises in 2023 in all capital cities except Darwin.

As is always the case with the Housing Boom and Bust report, Louis Christopher presents a range of scenarios with different estimates of the impacts on property prices.

The four different scenarios presented assume particular outcomes with interest rates, inflation and unemployment.

Under his base case, the one he expects to happen, Christopher broadly assumes that unemployment will not rise very high, that inflation will peak and then come down again, and that the Reserve Bank will stop lifting the official interest rate in the first half of 2023.

Under this base case, he is projecting moderate but solid price growth across Australia generally, with the capital city average being a rise of up to 7%.

According to Christopher, Sydney will do best, with prices potentially rising by almost 10%, with Perth next best with an increase of about 8%.

In each case, he is expecting single-digit growth. And at Hotspotting we think he’s being quite conservative in his forecasts.

Simon Pressley of Propertyology, one of the few analysts to correctly predict the 2020-2021 property boom, is also forecasting positive price outcomes in the coming year.

Long-time Brisbane real estate research analyst Michael Matusik recently published a report which showed that Australia has a significant shortage of homes, with demand exceeding supply – and this, he said, would tend to put upward pressure on property prices in 2023.

Our view at Hotspotting is that most markets across Australia will deliver some level of price growth in 2023.

There will be regional differences, as is usually the case in real estate, but the general trend will be solid increases in prices.

The key national factors influencing markets will include these:-

  • The shortage of homes, relative to demand
  • The serious undersupply of rental properties
  • Ongoing growth in residential rentals
  • The return of overseas migrants and students, with borders open
  • The increase in the migrant intake by the Federal Government
  • Ongoing strength in the Australian economy, with unemployment remaining low
  • The impetus from major infrastructure projects
  • The end of the cycle of rising interest rates

Those are some of the key national factors – but ultimately real estate markets are local affairs and some locations will outperform others.

In the new edition of the Rising Stars report published by Hotspotting in conjunction with the comparison site Canstar, we rank the 14 major market jurisdictions across in the nation based on a series of forward-looking indicators.

In the Rising Stars report, we rate the top 4 markets in terms of prospects in 2023 as Adelaide, Brisbane, Perth and Regional Queensland.

Other locations across Australia will also deliver price growth and generally there will be moderate to steady increases in most parts of the nation.


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