SQM Research founder Louis Christopher expects prices to start to recover in the second half of this year as long as the cash rate set by the RBA peaks below 4 per cent. Currently,the cash rate is 3.1 per cent.
He expects Australia’s central bank may lift rates in February and perhaps also in March as inflation peaks,and then leave rates on hold. The RBA’s next meeting is on February 7,with marketsexpecting the cash rate to peak at 3.5 per cent in the first half of this year.
Christopher says the fundamentals are getting in place for higher prices,which include stronger migration,a strong economy with low unemployment and good jobs growth and rents that are likely to remain elevated.
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Lloyd Edge,the founder and managing director of buyers agents Aus Property Professionals,says despite the property market facing challenges – with consecutive interest rate rises making it a tougher environment – it’s definitely a buyer’s market right now.
“This means that buyers have more options to choose from,and have more room to negotiate on price,” he says. “For savvy investors,this presents a great opportunity to make smart,strategic purchases.”
AMP chief economist Shane Oliver thinks prices nationally could fall another 9 per cent or so as rate hikes continue to impact the local market,resulting in a total fall of 15 to 20 per cent – its greatest ever peak-to-trough fall.