Should I sell my house now or wait? 2023

After a boom period in which Australian properties soared in value by +28.6 per cent, 2022 presented a more challenging environment for sellers. But the market has recovered with remarkable strength in 2023 with prices approaching record levels once again. 

Despite interest rates continuing to rise until mid-year, October saw an eighth consecutive month of national price growth. Clearly, there's a lot to consider for anybody thinking about listing their home. 

Is it best to take advantage of the current conditions in what has become a seller's market? Or is there value in waiting to see how things unfold over the coming months?

Whether you choose to sell isn’t just about current market conditions, but also the urgency of your own personal circumstances. For some of us, we needed to upsize into a bigger property yesterday, while for others, waiting for the market to rise might be a good incentive to release more capital before retirement. 

Let’s explore the current real estate climate, the pros and cons of waiting versus selling now, and what economists believe is on the horizon for the remainder of 2023 and beyond.

The current state of the market

According to CoreLogic data, Australia's property downturn halted and reversed in the early months of 2023. Since then, monthly growth managed to return to the highest levels seen since late 2021.

CoreLogic Australian Home Value Index - September 2023

Sydney and Melbourne both kickstarted the market recovery, and Sydney in particular has led the pack with gains of +10.6 per cent from its January low point. 

Perth and Adelaide are now at all-time highs with Brisbane right on the cusp of a new peak. Hobart, Darwin and Canberra are holding relatively flatter as rising supply levels outpace demand. 

Regional markets are showing softer performance on the whole but are still on an upward trajectory. 

On an annual basis, units have broadly outperformed houses as immigration boosts demand and buyers shift their search due to reduced borrowing power and stretched affordability. 

That said, the recent return of strong growth has been generally house-led. It remains to be seen whether that will become a new trend moving into 2024.

It's also critical to remember that price declines in 2022 came after a historic period of growth, and in many cases those losses have been recouped in the market rebound. 

Helpful resource: Get a suburb profile for any suburb in Australia

Australian property market forecast

Interest rates were the number one talking point since they began rising in May 2022, but the future is finally looking clearer. 

Since the RBA held off on hiking rates in July and August, three of the big four banks believe the cash rate will remain at the 4.10 per cent level set in June.

Big four banks' cash rate forecast 2023-24

All four banks then expect rates to remain on hold until the latter half of 2024 when cuts could begin, potentially helping to stimulate further growth. 

Again looking to the big banks, their latest forecasts have made a complete reversal from previously pessimistic standpoints, with a general sense that solid price growth should continue.

Big banks' Australian property price forecast 2023-24

Westpac Senior Economist Matthew Hassan explained that the improved inflation outlook means interest rates are unlikely to rise further, helping to boost property prices in the short term. 

However, while 2023 is expected to end with strong gains, "momentum is expected to slow from here, initially as more sellers come back into the market and, further out, as deteriorating affordability constrains demand."

Eleanor Creagh, Senior Economist at PropTrack, also pointed to record levels of overseas migration as a key factor driving values up. 

"Population growth is likely to place continued upward pressure on home and rental prices while supply conditions remain constrained," she said.

What are the upsides in the current market? 

There has been a big momentum shift across Australia's property markets. How long the renewed strength lasts remains to be seen. 

On the selling front, listings held exceptionally low since September 2022, and that shortage of available stock on the market drove prices up as vendors experienced less competition from other sellers. 

New listings in some markets finally started getting a boost in July, but buyer demand has been bolstered by a number of factors, as Pete Wargent of Allen Wargent Property Buyers explained. 

"Most of the major banks are forecasting price growth next year and in 2025 which would reflect a peak in interest rates, high population growth and very, very tight rental markets which tend to encourage first-time buyers into the market," he said. 

"Following that line of thought, demand should hold up pretty well."

Prices are already either at or on track to hit peak levels in many parts of the country which has driven larger numbers of sellers to capitalise on the recent capital gains. 

In CoreLogic's latest report, Tim Lawless said "We have already seen dwelling values reach new record highs in Perth and Adelaide. Brisbane looks set to reach a new record high in October, with home values currently only 0.6 per cent below their previous peak."

Thinking more broadly, it's worth remembering that if you're selling and buying in the same market, any potential losses that may be sustained on either the buying or selling side are likely to be balanced out on the other side of the transaction.

See what houses are selling for in your area with a free property report of your local area.

What about investment properties? 

Current market conditions are a bit of a double-edged sword for property investors. 

On the one hand, an extremely tight rental market is providing incentives. SQM Research data shows national vacancy rates still around historic lows at just 1.1 per cent in September, while rental rates have soared more than +10 per cent over the past 12 months. 

At the same time, interest rates rose a full +4 per cent over just 13 months, driving mortgage repayments far higher. 

How the two forces play out largely depends on an investor's loan balance. Some investors are opting to sell up to avoid inflated repayments, while others with lower or nil balances may benefit from the current rental market dynamics.

Should I sell my house now or wait?

If you’re still on the fence about selling, we get it. It’s a huge decision that deserves all your careful consideration weighing up the advantages and disadvantages for either scenario. 

Even if the market feels uncertain, it’s important to remember that it’s all relative and the market doesn’t stop. There will always be properties being listed and buyers out there wanting to purchase a home. 

It's also crucial to recognise that conditions will vary from suburb to suburb, so it’s important to understand your own local market — and to do that, you really need to get granular. 

Whether your property is impacted by price gains or falls depends on many factors including location, property type, and whether your home falls into the higher or lower end of the market.

If you’re seriously considering selling your home, you need to do your research. As a first step, get a ball-park estimate of what your home might be worth by using a free online estimation tool. 

Speaking to a top local agent is also one of the best ways to get a thorough understanding of how buyers are behaving in your suburb, what kinds of results are still being achieved, and what the best strategy could be for you to still get that dream sale result. 

At the very least, it’s helpful to hear what properties are selling for, what demand is currently like for homes like yours, and to get a no-obligation appraisal of what your home might sell for in the current market. A top agent who knows your market like the back of their hand will be able to help you along the journey.