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What’s in store for the property market in 2023? The real estate coach and trainer gives his two cents on how the start of the coming year will play out for the property market.
Speaking on a recent episode of Real Estate Exposed alongside Phil Tarrant, Tom Panos acknowledged that 2022 has been “a very challenging year for the real estate industry” due to the downturn hitting the capital markets at varying rates, thanks to the Reserve Bank’s monetary policy tightening.
He highlighted that volume — which the expert believes is the real estate industry’s bloodline — had seen dismal figures in the last 12 months and is beginning to have tangible effects on the industry.
“[The real] estate industry lives off volume. Volumes had been down. Volumes are down. Commissions are down. Income’s down. We’re beginning to see the casualties.
“There are certain real estate agents who have decided that they’re going to lead being a standalone agent and work within a pod. There are other real estate agents that we’re seeing that are leaving the industry completely, so it’s been very, very challenging,” he stated.
With the Reserve Bank widely expected to pick up its rate rise cycle at the start of the year after leaving the cash rate at a decade-high of 3.1 per cent in December, he stated that an “incredible rebound” won’t be in the cards for the market.
Mr Panos predicts that people “are going to sit back and watch” for the Reserve Bank’s next move and how high the central bank will take the interest rate ceiling.
“I think what will happen is people are going to wait to see what the Reserve Bank does because by then, they would’ve had a year of interest rate rises, and there should be an impact to what people’s behaviour is in the direction that the Reserve Bank has wanted.
“After that, I think that you’re just going to get a real estate marketplace, more people going and looking, and we’re going to move back into a cycle of real estate. I don’t think we’re going to get this incredible bounce where it’s going to go up 10 per cent or 15 per cent,” he forecast.
But Mr Panos pointed out that there are silver linings to the sobering market conditions.
For starters, he reiterated his belief that property values are close to hitting, if not currently, their lowest levels in some cities.
“I’ve said it before, and I’m sticking to it. Sydney, Melbourne, if it’s not bottom, it’s very close to it. In fact, some of the results in the last two, three weeks, including clearance rates, including unique properties selling at higher than expected, suggest to me that it’s probably closer to the bottom than heading to the bottom. I think it is at the bottom,” he claimed.
Offering his predictions for the coming year, he believes that the property market will see a good start.
“[My] prediction in real estate for 2023 is that we’re going to come back in the new year, that there’s going to be a bit of confidence and energy in January,” he said.
While he acknowledged that there would be uncertainty lingering due to the rate hikes, he advised agents to get their bearings before the year kicks off — stating that those who are savvy enough to weather the rate hikes “haven’t left” the market yet and are even getting ahead of the game.
“The good ones are sitting there, and they’re trying to lock in as many agency agreements as possible to launch in the first week of January. The reason it’s the first week of January is this simple reason, there’s no stock on there.
“So people are going to be looking around. There’ll be nothing. Everyone’s banking on properties coming onto the market after February, the Australia Day [public holiday]. You just get a glut of property fuel. What actually happens is that you get this oversupply of stock, and then what happens is it softens the price,” he said.
With that, he advised agents to stage open houses during the first three weeks of January to avoid competing with “thousands of properties” come February.
“If you do an open house on the 7th of January, on the 14th of January, and on the 21st of January, that’s your three opens.
“If you can sell your property around that period, you are better off doing that than launching your property on the 4th of February because you are going to be competing with, if you’re in Sydney, there’ll be over a thousand properties. If you’re in Melbourne, there’ll be close to 2,000 properties going on,” he stated.
Listen to the full conversation with Tom Panos and Phil Tarrant here.
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