Nothing Lasts Forever.

Last Sunday evening as I was sitting adjacent to the warm November rain, Guns N’ Roses resurrected my flaccid rock and roll spirit…oh the nostalgia.

It was hard to decide what was more confronting, how old the band looked or that I was completely at ease sporting loafers and eating canapés at a rock gig!

As we are now in the final month of the year I wanted to reflect on the 2022 market and tell you what may be in store for 2023.

What's changed? Lending. It’s undeniable that the rapid rise in interest rates combined with global uncertainty has corrected prices from their 2021 highs. Sales activity across all price ranges has fallen by 20-30% and until the market stabilises we expect to see low turnover for a while. Low activity isn’t a bad thing, it means no one is panicking but it’s frustrating. The mathematical formula is unrealistic sellers + cautious buyers = real estate agents curse and drink more wine.

Property is a great long term investment but the market in 2023 will face more headwinds, particularly for the over leveraged. Rates may not rise as quickly from here but a lot of mortgage holders face refinancing in a very different/much more expensive lending environment.

In short, I think we will see more of the same. A sluggish market with auction clearance rates hovering around 55% - 60%. For conditions to heat up many buyers will want to see rates leveling off and confirmation that inflation is under control...that may take quite a while.

Before I sign off, I want to thank my team for not only a great year but an exceptional effort in November, 12 hard earned sales (totaling over $33M).

Until next week,

David