As the year comes to a close it’s inevitable that people start looking to the future and what it might hold. I think we can all agree that there will be some challenges ahead, however, I still see room for optimism in 2023. Here’s why…
First and foremost, call me an optimist, but I always choose to see the glass as half full, rather than half empty. Take for instance, the Sydney residential property market which time and time again has demonstrated long-term resilience that consistently delivers good returns.
And I do think there are factors to support the idea that the market can hold relatively firm throughout next year.
For example, don’t underestimate the potential impact of the new government policy available from the end of January next year, which allows first home buyers to pay an annual property tax rather than stamp duty on properties valued up to $1.5million.
This represents significant financial relief for first home buyers. Especially when you consider that, on a property purchase of $1 million, stamp duty would be over $40,000 and rises to nearly $70,000 for a property valued at 1.5 million. From next year those opting for the annual property tax will pay a fraction of that cost spread out over ten years. This frees up tens of thousands of dollars for new home buyers to invest in their properties.
Then there is the rental market. There is no end in sight to the high demand for rental properties given the lack of supply. That bodes well for the sales market as investors can look forward to strong rental returns on their properties.
And then there is the key element that cannot be overstated. The belief that (regardless of changing economic circumstances) Sydney residential property represents a solid and enduring financial investment. We saw that demonstrated through the uncertainty of COVID. And we are still seeing it now. The market has eased from the highs of 22% annual growth, but transactions are still taking place.
I do envisage 2023 might be a bit slower, but that doesn’t automatically mean weaker. Whilst potential vendors and potential buyers are both showing greater consideration in the sales process and taking more time to negotiate and weigh their options, the market driver will always remain. People want the stability of property ownership.
It might take longer but the Morton team of experts will be on hand to help clients make the right decisions and to support them as they navigate the road to achieving a successful property outcome in 2023.