While the cost of living continues to rise, property prices are declining. This is good news for those looking to buy property, especially if it\u2019s for the first time. Indeed, the State Government has introduced to parliament a proposal to give home owners the option of choosing Stamp Duty OR Land Tax. So, what do the experts say about the property market ahead?<\/p>\n\n\n\n
To manage property is to first manage interest rates and the influencing factor of inflation. Inflation is currently almost double what the 2021 forecasters indicated for 2022-2023. This has the effect of increasing the cost of every dollar by about 17%. In other words, something that was $1.00 last year, will cost $1.17 next year. Everything is more expensive and this influences the property market. If Australians are paying more just to live each week, they can\u2019t entertain the high prices of yesteryear. House prices will come down to entice buyers into the market.<\/p>\n\n\n\n
So, who will feel inflation the most? Those currently locked in to high levels of variable debt will struggle to meet rising interest rates. Cost of living will continue to be a pressure for those people too. A simple bottle of milk has skyrocketed in price, and these things all add up to a family\u2019s weekly budget.<\/p>\n\n\n\n
Those who are set to benefit the most include first home buyers – those people who have been diligently saving up a deposit and who are not relying on the sale of one property to fund an upgrade to another.<\/p>\n\n\n\n
Property prices in Greater Sydney have decreased around 8% this year. Some economists predict a further drop of 15-20% in property prices, and many Real Estate agents have said that sellers are much more open to negotiating a lower price than they were 12 months ago.<\/p>\n\n\n\n
The State Government is also exploring initiatives to further support first home buyers. We\u2019re watching progress on Perrotet\u2019s proposal to give first home buyers the option between an upfront Stamp Duty or a yearly Land Tax. Additionally, those looking to crack into the property market or upgrade or expand within it will borrow with caution, and ensure they don\u2019t hit maximum loan amount that will become unmanageable if interest rates rise.<\/p>\n\n\n\n