Housing market on the up again (May 2023)

Marty McDonald

Sydney property prices surprisingly on the up again

Over the last few years, we have seen a volatile housing market with a house price correction (due to regulatory intervention), then a pandemic and a post pandemic housing boom, then a rapid pull back in prices as interest rates were increased at their fastest pace in memory. To most pundit’s surprise, the market started rising again in March and April. The increases were across the board too. Quite a surprise!

It shows just how resilient the property market is. There has been a lot thrown at it over the last 10 years, yet prices keep trending up.

Lack of supply driving prices higher in Sydney

In Sydney there have been some surprisingly bullish prices paid of late with many suburbs recording record sales prices. We think the primary reason for this is a lack of supply particularly at the top end.

Looking at the weekend auction results in Sydney the biggest trend we have noticed this year is the small number of properties going to auction each weekend and the relatively strong clearance rates.

We are still seeing less than 600 properties offered for auction across Sydney each weekend with average clearance rates around 70%.  Traditionally we would expect auction numbers to be well over 1000 per weekend at this stage of the year with the clearance rates as strong as they have been.

Sydney market prediction

We have noticed many people with long term property plans have been waiting for the signal that it was “safe” to buy. We think that prices rising over 2 consecutive months and the outlook for interest rate becoming more benign may be signal that these buyers have been waiting for.

If vendors stay reluctant to put their homes on the market we expect this mismatch in demand and supply to cause prices to jump significantly in the next 12 -24 months.

Rental crisis only adding to pressures on prices

Most area in the country are currently experiencing record low vacancy rates causing rental inflation of over 20% pa in many places. It is a gloomy outlook for renters and it’s making it difficult for many people to be able to afford a place to live at the same time as increased cost-of-living pressures.  

With the increased immigration intake, expats returning home during Covid and lack on new building supply all adding to the problem. Current vacancy rates for Sydney are 1.3% and 1.1% Nationally. A balanced rental market would have a vacancy rate around 3-4%.

For investors the increased rents may help ease some of the pain of recent interest rate increases or for some make the prospect of buying an investment property attractive. If you have been thinking about getting an investment property, we can workshop the viability and cash flow with you. Please get in touch.

Fixed rates worth a look?

Fixed rate loans are available at the same interest rate as variable rate loans.

5.35% pa fixed for 2 or 3 years is available at time of writing. (P&I, owner occupiers, 20% + equity)

If you are looking for more stability or are worried about affordability if rates go up significantly more from here, then a 50/50 fixed and variable loan split loan may be a good hedging option. Give us a call to discuss and we can look at getting you onto a fixed rate with your current lender or refinancing you to another suitable lender.

Cashbacks ending soon

Many lenders are starting to remove their refinance cash back offers as lenders are apparently writing loans at less that the cost of capital.

CBA, Bankwest and Nab have all notified us that their cash back offers will end from next month. If anyone is still thinking to take advantage of one of these offers, please get in touch.

At the time of writing there are still a few $3K and $4k offers around.


About the Author: Marty McDonald is principal of mortgage broker “Mortgage Experts”. Marty specialises in assisting active property investors with loan structuring advice and implementation as well as helping credit worthy borrowers with slightly outside the box income and employment situations. Find Marty on  and LinkedIn.
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