Australian Property Market Outlook for Next 12 Months
Property management companies and investors across Australia are eagerly awaiting news on soaring interest rates and falling house prices. These 2022 trends are a far cry from the housing boom and seller’s market of the last few years, leaving millions of Aussies to wonder what’s next. In this post, Managed App takes a closer look at rising interest rates, the predicted fall in Australian house prices, and what this means for investors.
Dropping House Prices
As reported by news.com.au, Australian house prices are predicted to drop by up to 15% over the next 18 months, with a 5%drop expected by the end of 2022. While falling house prices may signal alarm for owners wanting to sell and get a big return on investment, it’s important to remember that the market has inevitable ebbs and flows. Eventually, house prices should rebound, and that’s why now is a good time to get into the market. Whether you’re a first-time homebuyer or looking to expand your property rental portfolio, be on the lookout for great deals on valuable investment properties.
Rising Interest Rates
Australian property management companies need an appropriate balance of owner and tenant needs. Rising interest rates and mortgage repayments factor into many owners’ expectations on rent prices and how much they need to charge to stay competitive and still make their loan payments each month. According to Reuters, the steep interest rate increases of 2022 directly influence housing prices and play a huge role in the predicted fall over the next 12 months. Many analysts believe the current 1.85% cash rate could reach 4.0% by the middle of 2023 as banks sharply raise fixed rate borrowing costs and tighten lending requirements.
Need for Quality Tenants
With a market slowdown anticipated in the next 12 months, it’s important that existing owners focus on finding and retaining quality tenants. Despite the historic drop in house prices, rental prices are estimated to increase by 10%, as outlined by ABC News. Owners need quality tenants who can commit to taking reasonable care of the property and paying rent on time, while tenants need property owners and managers who will look after their best interests.
After the ups and downs of the last few years during the COVID pandemic, both owners and tenants will benefit from a solid relationship. This is especially true given the market outlooks for major Australian cities, as Sydney and Melbourne home prices are predicted to fall the most. August 2022 saw a 1.6% monthly decline in major cities alone.
Whether you work for a property management company or own investment properties, it’s important to stay up to date on current market trends and the outlook for the next 12 months and beyond. Managed App is here to help anyone investing in the Australian property market, thanks to our cutting-edge online real estate software with features that benefit agencies, owners, tenants and trades people. Let’s chat about your property rental goals today.