2023 real estate predictions in review: What Graham Cooke and Leanne Pilkington got right and wrong – Beragampengetahuan

How did 2023 measure up against expert expectations and what’s taken hold in the market at the end of the year?

Many predictions were made of double-digit declines in house prices this year, along with various punts on where interest rates would peak and what it would mean for the property market.

And others made calls about interest rate rises halting, which turned out to be incorrect – while predictions about the housing crisis and availaibility of homes were not fully realised on the impact it would have on the country at the time of their forecasting.

In the second of our two part series — we look back at what some property pundits said would happen and how close their predictions were to being correct.

READ PART ONE HERE

GRAHAM COOKE

Finder’s head of consumer research

Finder’s panel of economists in January predicted the cash rate would peak at 3.6 per cent and fall to 3.3 per cent by the end of 2023.

Panellists largely cited lowering energy inflation, the unemployment rate, and the abatement of supply chain issues as the main drivers of the movement in the cash rate in 2023.

What actually happened was a cash rate peak of 4.35 per cent driven by persistent inflation and a robust housing market, with no fall as yet.

While we didn’t have Nostradamus on our panel, what this does show is that the future is very hard to predict, even for those with all of the numbers at hand.

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Nobody saw Covid-19 or the war in Ukraine coming, which were both major drivers of inflation over the past two years.

Similarly, at the start of 2023 nobody saw the war in Palestine coming, and its potential effect on global politics is still playing out.

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What we can say is that inflation does, finally, look like it may be on a downward trend. Finder’s Cost of Living Pressure Gauge showed a drop in pressure on households through 2023.

While there has been a slight uptick in November driven by the most recent rate increase, I would expect to see pressure drop in the first half of 2024.

Finder’s panel is even starting to talk about cash rate decreases, though we will have to wait until the later half of next year.

Even if we are not quite at the end of this inflationary period, we should be near it – and 2024 should be a better year for Australian households.

LEANNE PILKINGTON

REIA’s president

Australia’s housing market has reached a crisis as supply continues to dwindle and migration soars.

There is no single issue in the minds of Australians – as property consumers, taxpayers and voters – that is more prominent and more urgent than Australia’s current housing crisis.

Our recent Housing Affordability Report showed the proportion of income required to meet the average loan repayment has increased to 45.5 per cent.

While governments and councils are working to address the impact short-stay accommodation (SSA) has on supply, it continues to boom at a time when Australia’s housing crisis continues to worsen.

Real Estate Institute of Australia’s new report, Short Stay Accommodation, found in the March quarter of this year a total of 133,968 places were available in Australia, an increase of 3.7 per cent over the quarter and an 22.8 per cent over the past year.

Real Estate Institute of Australia president Leanne Pilkington.

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While short stays has been an essential part of meeting high demand for domestic tourism accommodation, it has come under fire for eating into long-term rental housing and being one of the driving factors behind the rental crisis.

Of these short stay places, 109,726 (81.9 per cent) were entire dwellings (that can transition between the long-term rental and the short-stay accommodation markets), an increase of 3.7 per cent over the quarter and 26.6 per cent over the past year.

The east coast of Australia is the predominant provider of short stays, and where the majority of crucial long-term housing is desperately needed. For instance, the March quarter in Sydney showed the gross annual income on a two-bedroom dwelling in the private rental market was $33,900.

On average, it would take 122 days of successful hosting to make the same income in the short stay rental market.

In regional NSW, it would take about 113 days of hosting the same size dwelling in the market.

The disappearance of housing stock has impacted on rental affordability, as we know.

Rental affordability declined with the proportion of income required to meet median rent increasing by .5 percentage points to 23.6 per cent.

Rental affordability declined in NSW, Victoria, Queensland and South Australia, but improved in Western Australia, Tasmania, the Northern Territory and the ACT.

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