The Current Property Market – 3 Things to Know

28 November 2022

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It’s been a roller coaster ride in the Australian property market over the last 3 years. Read on to find out the top 3 things you need to know about the current state of the market, as well as answers to FAQs.

1. Property market prices

Property prices in most markets across Australia boomed in 2020 and 2021, but have generally dropped in 2022. The price fluctuations have varied in different markets and with different types of properties. For example, house prices have tended to be more volatile than apartment prices.

Property price increases and decreases are a normal part of the long-term property cycle. They are influenced by supply and demand, just like the prices for goods and services.

2. Interest rates

Interest rates in Australia were at record lows prior to 2022. However, during 2022, the Reserve Bank has lifted interest rates by 2.75% in an attempt to combat rising inflation.

Rising interest rates reduce the borrowing power of home and investment property buyers because they increase loan repayments. They therefore tend to reduce the demand for property, placing downward pressure on property prices.

You can use our borrowing power calculator to check how much you might be able to borrow at higher interest rates.

3. View property as a long-term investment

History shows that Australian property prices have a long-term growth trend. You should therefore view property as a long-term investment. If you hold onto property for at least seven years, you will generally be able to ride out any market downturns.

Most property loans are also for 25 or 30-year terms. Interest rates are likely to both increase and decrease over this time. Once again, it’s important to take a long-term view. When assessing your loan application, lenders assess your ability to make your repayments even if rates rise by 3% above current rates. This helps to ensure that you will still be able to afford your repayments even if interest rates rise.


Will property prices stabilise?

If history is any guide, yes they will. Periods of rapid price increases or decreases then to be followed by sustained periods where property prices stabilise.

Will interest rates keep rising? 

If interest rates keep rising, interest rates will keep rising. However, if the inflation rate stabilises or starts to fall, then they won’t increase.

How we can help

If you are thinking about buying a home or investment property and you’d like to explore your finance options, then talk to our licensed and experienced brokers at Wisebuy Investment Group. We service clients in the Newcastle, Lake Macquarie and Maitland areas. We can also help you if you’re looking to refinance your existing home or investment property loan.

We work with more than 60 lenders in the Australian market and we can even help you with any property loan application. Importantly, we work for borrowers, not lenders.

Contact us today for an obligation-free chat to find out more. We’d be happy to answer any questions you have.