Exec predicts buyers have between six and nine months to take advantage of lower prices
The CEO of McGrath Estate Agents predicts that buyers have between six and nine months more to take advantage of the 10%-15% price drops in the real estate market before prices begin to rise by at least 5%.
In his annual McGrath Report, John McGrath predicted that the market will have normalised by the end of the year, according to The Australian.
“At the moment we think the market is close to the bottom,” McGrath said. “And we know that with [previous] corrections the market rarely goes down beyond 10% … [so] we think it’s close to the bottom. The next major issue will be once the fixed loans come off from 2% and rise to 6%, that will cause mortgage stress. Some people will be forced to sell because they can’t refinance, but we will see more migrants coming in. These two factors will even out each other. This time next year we will see a more normalised market.”
McGrath said the fixed-loan issue would probably most severely impact the lower- to middle-priced market since owners at the upper end generally have more cash and equity, The Australian reported.
He also predicted that there will be a softer landing than forecast, with banks already working with customers to help solve their mortgage issues.
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“Not one – not the banks nor governments – wants to see mortgage stress and a further decline in values,” he said.
McGrath also highlighted areas that have been mostly overlooked but have seen strong growth. Among his top Sydney picks for next year is the east’s Edgecliff, The Australian reported.
“A lot of people see it as a train station and a shopping centre, but it’s on the edge of the water. It does not have the cachet of Darling point, but it represents value,” he said. “An apartment in Darling Point is circa $3 million, while one in Edgecliff is $1.6 million.”
McGrath also recommended Oatley “given COVID has reawakened our appreciation for the outdoors,” while in the North he recommended Balgowlah Heights.
“This tightly held northern beaches suburb offers the ultimate in picturesque family living … boating, large houses, harbour surrounds and direct access to national park bushlands,” he said.
