House Prices in 2023
How you can make the most of housing costs in 2023.
As a homeowner (or potential homeowner) you may have noticed that housing prices have been on a steady increase.
But why is this happening?
The answer lies in inflation, which is the rate at which prices for goods and services increase. When it comes to housing, inflation has a direct impact on how much homes cost. It also has an impact on how you manage your property investment and equity.
Although inflation is directly impacting housing prices across Australia, there is still an opportunity for savvy buyers (and sellers) to get a good deal.
Here's what you need to know about housing prices and inflation in 2023, and how you can utilise Best Rated Transport to make the most of it.
What Is Inflation?
Put simply, inflation is an economic concept that measures the rate of change in the price of goods and services over time. Inflation is measured by looking at the Consumer Price Index (CPI). The CPI tracks changes in prices across a variety of categories. These categories include food, clothing, entertainment, transportation, and housing. The CPI is used to calculate the average rate of price growth in a given year.
What Does Inflation Have to do With Housing Prices?
Inflation affects housing prices because when prices for other goods and services increase, so does the demand for housing. This demand drives up home values as buyers are willing to pay more for a home than they would have if there was no inflation. Additionally, since houses are considered investments, people tend to purchase them when they expect their value to increase over time due to inflation.
It's something that needs to be considered if you are wanting to purchase or sell property. It is even more significant in the current housing market.
How Inflation Impacts Homeowners
For current homeowners, rising inflation can be beneficial as it increases their equity and net worth. However, it can also be detrimental if they are trying to sell their homes because higher prices can make it difficult for potential buyers to afford them. Additionally, rising inflation means that mortgage payments become more expensive as lenders adjust their interest rates accordingly—which could potentially lead to homeowners having difficulty making their monthly mortgage payments or even losing their homes if they fall behind on their mortgages and owe more than what the home is worth.
It's imperative that all home owners and potential buyers are aware of the effects of inflation on their own financial position, and that they utilise this information when communicating with financial service providers, real estate agents or brokers.
What the Statistics Say
On average, and as reported by Forbes, the current impact of inflation has influenced a drop in housing prices by $64,820. Sydney- 13%, Melbourne- 8.6% and Brisbane - 10%, have seen the highest decline in property costs across Australia. However, although there has been a significant drop in the average housing price over the past six months, the average housing price remains remarkably high. That's why being cautious at this time is the beginning of real estate and property success.
Buying a Property when Prices are High
When looking to invest in real estate, timing is key. However, trying to time the market is impossible and choosing when to buy can be a difficult decision in itself. If you are considering buying a property when prices are high, it's important to take into account the potential benefits as well as the risks of such an investment. Despite the expense that comes with entering the market at a peak, there may be long term strategies that will work in your favor if you commit to the purchase. Nevertheless, looking for alternative purchase options like new construction or foreclosed homes could help you find more affordably priced properties and ultimately provide a much better return on investment.
What you Need to Know
Understanding how inflation affects housing prices can help you make informed decisions about buying or selling your home or investing in real estate.To better anticipate changing market conditions you need to know what causes inflation. Some factors include increased demand or changing interest rates. An understanding of these can help you better anticipate changing market conditions so that you're ready when things start to heat up again in the future. With access to timely information about inflation trends and data-driven insights into local markets, you can make sure your finances remain secure regardless of where the economy goes next.
If you're in the housing market and looking to compare the best avenues for you to relocate, move or transport goods, visit the Best Rated Transport quote tool HERE.