The south west suburb of Abbotsbury could prove popular in 2023.
Select Sydney Suburbs set to increase
New forecasting suggests interest rates could peak by July, bringing prices back up by the end of the year in these select Sydney suburbs.
Property prices could be set to rise again by the end of this year in a handful of Sydney suburbs if interest rates peak by July, a top property valuation firm has predicted.
Herron Todd White’s (HTW) ‘Month in Review’ report for February has listed certain parts of south western Sydney as being the most likely to see an uptick in prices by the end of 2023 while other regions such as the Northern Beaches, south Sydney and the inner west are likely to see further declines.
House values in Edmondson Park are up 15 per cent from February last year.
Apartments expected to perform
Apartments in some regions have also been tipped to perform well as investors look to capitalise on rising rents.
It comes as economists predict a further decline of 5 to 8 per cent across Sydney following falls of 12 per cent over 2022.
Denham Court has been tipped to do well in 2023. Picture: Nearmap.
HTW director Shaun Thomas said recent inflation rate data from the US indicates inflation may soon peak, meaning the cash rate may reach its upper limit by July.
“Should this be the case, it is possible we could see the bottom of the market around the third quarter of the year,” Mr Thomas said.
HIA chief economist Tim Reardon said house prices were likely to return to growth about six months after the final increase to the cash rate.
“Typically when that happens we see a surge in prices for a short period of time and that’s because customers that have been holding back waiting to find the bottom of the cycle suddenly find that they’ve missed the bottom and they all just jump at once,” Mr Reardon said.
Rising rents could prompt some apartment dwellers to purchase a home. Picture: Jeremy Piper
Mr Thomas said while not all Sydney regions are tipped to see a recovery in prices by the end of the year, an influx of investors and first home buyers looking to take advantage of stamp duty changes would create more activity in the lower end of the market.
“The sense is that market participants are just looking to wait out the interest rate rises so they can invest with some certainty about what it will ultimately cost them,” he said.
Once there is renewed certainty around borrowing capacity, south western Sydney could start to see a small lift in prices by the end of 2023 that continues into the new year, with family friendly suburbs such as Harrington Park, Abbotsbury, Edmondson Park and Denham
Court likely to “fetch considerable prices due to affordability, proximity to services and the appealing family lifestyle they provide.”
Apartments could prove a popular investment in 2023. Picture: Gaye Gerard.
With a median house price of $1.07m to $1.5m, family homes in these suburbs could be desirable for eligible first home buyers electing to pay an annual land tax instead of upfront stamp duty.
Rising rents in unit markets of the inner west, the Ryde area and the north shore could see investors return and the gap between house and apartment values experienced through Covid begin to narrow.
“With rentals continuing to increase and overseas migration starting to ramp up, 2023 may be a year in which we see the unit market start to strengthen,” Mr Thomas said.
“In many cases, renters might be better off purchasing the unit they are currently renting rather than leasing.”
Buyers are likely to become more active about six months from the final rate hike. Picture: Julian Andrews.
SQM data shows Sydney rents are about $170 a week more than a year ago, when the typical rent on a Sydney home was about $575 per week.
(News.com.au – Feb 2023)
If you would like assistance with a home loan health check, purchasing property or refinancing, or to discuss any other lending needs, please do not hesitate to contact Geoff.
PROSPERA FINANCE — Geoff Norman
MOBILE LENDER PROVIDING MORTGAGE BROKERING SERVICES — FINANCING HOME LOANS — FIRST HOME BUYER LOANS — CAR LOANS — LOW DOCUMENTATION LOANS — EQUIPMENT LEASE
