We’ve been saying this for a few months now, but it’s official, the national downturn is in full force!
July saw the third consecutive drop in house prices nationally, with five of the eight capital cities recording month-to-month declines. This decline is comparable to the GFC of 2008 and the early 1980s, which may come as a bit of a shock for those who were around. for those who weren’t, the good news for you is that I was, and 2008 was one of my best years in real estate.
The systems and strategies I used during the GFC that saw me far exceed even my own expectations are now similar to those that every new Real Estate Brilliance member is introduced to during the Agent Success System. If you’re interested in attending the next Agent Success System, get in touch with me and I’ll see if I can fit you in. Or, if you want an insight into the systems and strategies you should be using now, make sure you register for my upcoming Surviving A Crash webinar on September 14. REGISTER HERE.
Watch the video below for a more comprehensive look at how the market performed in Australia and New Zealand during July.
If you’re looking for a few quick notes, here they are:
- Although the trend downwards started well before the rate rises, there has been a sharp downward curve since they were announced
- Selective lending and greater deposits needed have also caused a slowdown in mortgages
- Stock levels have increased as much as 10 – 15% which is higher than the 5-year average. With the Spring selling season looming, that level is threatening to increase even further
- Although house prices are dropping nationally, it’s important to remember they are coming off a very high base. This means there is still a long time to go before panic needs to set in
- Vacancy rates are at 1% with low inventory. It’s looking like a rental crisis could be on the cards
- The forecast for the cash rate is expected to be 2% to early 3% meaning mortgage increases could double compared to what was being paid at the lowest
- Rising household expenses, as well as the cash rate, will continue to add to the downturn
- This should curb inflation and even cause interest rate cuts, which means the rate rises have done their job
- Although further downturn is expected, it should find its floor reasonably quickly by mid to late 2023
- The big test will be the spring/summer selling season, the amount of stock that will bring, and how much is absorbed
- The good news is the investor market should improve and offer more available rentals to those who need them
