What trends do brokers expect to see in 2023?

Refinance volumes to continue

I’M SEEING many of my clients purchasing, as it’s [still] a great time to buy at the moment. A lot of first home buyers are getting into the market and taking advantage of the record number of government grants and schemes, [but] we are also starting to do a lot of refinances for clients who locked in ultra-low fixed rates at the beginning of the pandemic.

My personal forecast for 2023 is that, as the RBA cash rate increases level out early-to-mid next year, we will also see property prices across Sydney start to increase again. Anything under $1.5 million will be hot property, given the new annual land tax option for first home buyers [in NSW]. Ironically, I can’t imagine this won’t push up the prices, even though the scheme is designed to help first home buyers get into the market.

Christian Stevens, Shore Financial

Time to tighten spending 

I’M SEEING more clients wanting to know what rate they should be pretending their home loan is so that they can set a repayment amount and breathe easy. We recommend this for all clients: pretend the home loan is 1–2 per cent higher than it is right now, set repayments at that level (on owner-occupied home loans) and then build up redraw.

We’re doing lots more refinances to smaller banks who are chasing hard with rates and covering costs in moving over. I’m also prioritising lenders who will provide great, ongoing, easy repricing through the broker for clients so the rates stay competitive over the years. So many more clients are seeing their ability to refinance lowered with each rate rise.

2023 is going to be a harder year for single borrowers, which is a huge proportion of my client base, so we’re making sure they’re keeping things tight (boring I call it!).

Kirsty Dunphey, Up Loans

Housing needs are changing

2020 SAW a massive change in what people need from their homes. [For example], home office spaces became a necessity, many are also thinking of more futuristic-style houses with consideration for smart homes (or the ability to adapt to one) and space to charge electric cars. People are also more aware of what they want and are savvier than before, which will make 2023 an interesting one to watch.

If you’re looking to invest in property, 2023 could be your year. The rental crisis has created a need for investors, so the time to think about buying an investment property is both now and next year, while we’re still experiencing this dip.

First home buyers may be more cautious about entering the market right now because of rising interest rates, but there are still many out there buying.

Rebecca Jarrett-Dalton, Two Red Shoes

Budget for higher rates

INTEREST RATES are going to continue to rise, I think we’ll have another three to five rises, [and] I think house prices are going to continue to decline next year. People generally think that quarter per cent is not a lot of money. Frankly on a decent-sized city mortgage, it’s a lot of money.

But by the end of 2023, hopefully, inflation will be sorting itself out and interest rates will stabilise and then perhaps by 2024, we might see a bit of a turnaround with interest rates coming down and house prices might start to pick back up.

It’s a good time to sell, and that’s what I keep telling my clients… even though you’re not getting what you would have got last year, you’re still in a declining market. [And] you’ve got to have the conversation about house prices continuing to come down because if they’re borrowing at 95 per cent LVR… they [might] put down for a house mortgage that’s higher than the value of the property.

Louisa Sanghera, Zippy Financial