Housing prices fall but Aussie buyers are slow to jump in

australia house prices fall after 2022 high

With property prices falling at a rapid pace, there could be an opportunity for buyers to enter the market – but whether or not Aussies are seizing that opportunity remains to be seen.

In fact, research commissioned by Aus Property Professionals shows that some 7 out of 10 Australians think that 2023 is the wrong time to step into the property market. 

In contrast, only 35% of Aussies think that 2023 will be a good year to buy property. We take a look at whether they’re onto anything, before you dive into a flash new place with a fresh new home loan.

What’s happening in the housing market?

Right now, Australian property values are falling at the fastest rate they have on record. This is a major peak-to-trough decline, representing the speed of the fall from the price highs of May 2022. 

It comes in time with the climb in home loan interest rates, following on from the Reserve Bank of Australia (RBA) bringing up the cash rate to combat inflation.

As rates go up, so do the cost of mortgage repayments. If you’ve been making repayments on a home loan, you may have noticed a significant increase after months of climbing rates compounded upon each other. 

Aussies may have also found their borrowing power decreased by the raise in the cash rate, which means less money available to buy property.

Is it a good time to buy a house?

Despite rising rates and risk factors, there definitely seem to be opportunities for buyers in the current market. Property expert and buyer’s agent Lloyd Edge says, “We’re definitely in a buyer’s market right now, with an abundance of great deals available and less competition.”

With prices dropping, buyers could take advantage of the trend to make strategic moves with their purchasing. This is especially important for first home buyers, who may find that their deposit is able to travel further. 

“Buyers have more options to choose from, and have more room to negotiate on price. It's a great time to enter the market for those who have been waiting on the sidelines for the right opportunity,” adds Edge.

There is also an end in sight to rate rises, which are predicted to peak anywhere from February to May 2023, depending on which big bank’s economists you turn to for your forecast.

It’s worth keeping mind however, that in a more subdued market generally there can be a short supply of homes in certain suburbs. 

If you are interested in stepping into the current property market, it’s important to do your research and be forward-thinking before committing to any home loan. These will have to weather many more peak-to-trough cycles, so you’ll need to be forward-thinking. We’ve started you off with some below!

Stepping onto the market? Take a look at the Hottest 100 Suburbs for property shoppers, or see the suburbs where first home buys are booming. Once you’ve got a place in mind, read up on our Best Home Loans.

Home loan comparisons on Mozo - last updated 13 April 2024

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