Prediction for property price to fall 11% in 2023
Can anyone predict that property prices will fall accurately? Well, the same answer it will be for the question of whether anyone can predict accurately when property prices will increase. I certainly have zero idea that the condo I bought in Kelana Jaya for RM183,000 would be sold at RM460,000 8 years later. No one told me so and if someone told me so, I would laugh at their prediction.
Well, here’s one prediction for property prices to fall by 11% in 2023 for Australia.
Article in news.com.au House prices to plunge 11 per cent next year, new NAB (National Australia Bank) report warns. It says that by midway of 2022, property prices will weaken and by 2023, NAB predicted that home prices will fall by 11 percent.
The main reason is because the Reserve Bank flagged that interest rates could rise at some point in 2022. However, predictions for property prices is still positive for 2022. Take a look at the chart below.
For a full article about the predictions and all the other details, refer here: Article in news.com.au
Let’s assume it does fall, what does it tell?
We just need to look at the UNBELIEVABLE numbers for 2021 to realise that perhaps property prices have moved too far too fast? There is no way anyone in Australia would get a salary increment anywhere near those kind of increase in property prices. The average of capital city price increase was 21%!!
If it does fall in 2023, it meant that the property price is trying to readjust itself back to the realities on the ground; salaries of potential buyers need to rise first. If we look at the numbers as a whole from 2020 all the way to 2023, we also need to realise that the price is till up versus down. Here’s a simple calculation using all the average numbers with a AUD100,000 home. (no such prices in Australia, generally)
AUD100,000 x 2% up = AUD102,000 (2020)
AUD102,000 x 21% up = AUD123,420 (2021)
AUD123,420 x 2.7% up = AUD126,752 (2022)
AUD126,752 x 9.3% down = AUD114,964 (2023)
Generally, prices are up by 14% versus 2020 or around 3% per year. I am okay with such an increase for my property because it’s still a big amount of money in terms of capital appreciation. If you are also happy with it, now you know why Australians love to buy properties. Happy knowing.
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