When will price declines stop? Right now, it’s still very uncertain although, based on our best measure of demand, the absolute worst of the downturn is behind us. Average active bidders at auction hit a low of 2.3 bidders per auction in July 2022 but this level has started to creep upwards. We’re nowhere near where we were last year – not surprising given how strong the market was in 2021 – but buyers are returning which looks like it will prevent the sharp falls in pricing.
The wildcard however continues to be inflation and its impact on interest rates. While fuel prices and supply chains are improving, we still have a lot of problems with construction costs and rents. This month the Reserve Bank of Australia (RBA) increased interest rates less than expected (0.25 per cent instead of 0.5 per cent) which was good news for mortgage holders.
More negatively, inflation continues to spiral upwards overseas with some economies, most notably the United Kingdom, expected to go into recession as a result. Ideally, Australia will be able to dodge what’s happening overseas in the same way we did following the Global Financial Crisis. Right now, it looks like we will.
This month in Ray White Now, we provide a focus on investing in property. More particularly, we take a look at whether a down market is a good time to invest in property. We then provide a state by state look at each capital city to provide an overview of their outlook for investors. In our commercial piece, we look at who’s been buying and selling. While private investors have been net sellers of commercial property during the last two years, this may be reversed given changed conditions so far this financial year. Finally, we take a look at some of the reasons why it may be worth selling now, even though conditions are more subdued.
We hope you enjoy this month’s Ray White Now and we’re proud to be providing you with relevant, timely and interesting content and data in 2022.
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