It’s the latest in a flurry of forecasts that suggest as interest rates go up property prices will come down. Economics will tell you there’s some logic to that.
So will Brissie prices drop by 10 per cent?
That’s overstating the forecast more than a little if you ask us.
The PropTrack July Market Outlook forecast that Brissie prices will stay largely flat between now and December 2022, and will drop between 6 per cent and 9 per cent by December 2023.
So let’s blame the “10 per cent” headline on a rounding error.
Will prices actually fall? If there’s one thing Australia has learned in recent years it’s that forecasting is just a fancy way of talking about a guess. PropTrack notes in its report that it has changed its own forecasts from January this year as different economic forces have hit the Aussie market.
“The fact that interest rates began to rise much sooner than expected has been the main driver in the shift of our forecasts produced in January of this year. We are expecting further interest rate rises over the coming months, which we anticipate will push prices lower.”
So what does it mean to your bottom line if you want to buy or sell?
Be clear on why you want to buy or sell. If you’re buying a home to live in over the long term, you may not see much benefit from trying to outsmart the market. Keep it simple: know your budget and your priorities and buy a home that matches both. If you’re trying to make an investment dollar, then beware of working to short term timeframes. Property investment is a long term game, so look at longer term market fundamentals not just point-in-time blips.