One of the oldest gods of ancient Roman times was Janus - a god who looked both forward and backward simultaneously and of whom January is named after.

His double-bearded face on coins and similar was associated with doorways, gates, and arches along with other middle ground areas such as life/death, beginning/end, youth/adulthood and war/peace.

Now, we know you're wondering why we've begun a property blog with an ancient Roman god, but there's a reason for this, we promise!

Not only have we just started Janus' very own month but just like him, we're here to give you both past highlights (from 2022) and upcoming forecasts (for 2023). 

Highlights of 2022

• RBA cash rate rises
• Adjusting market 
• Rising cost of living expenses & lower consumer confidence

After an 18-month-long, 0.1% cash rate, the Reserve Bank of Australia (RBA) spiked the national cash rate eight times in 2022 to end at 3.1% in December.

From what RBA governor Phillip Lowe told the country in his last announcement for the year, we can expect to see more such increases in 2023 as the central bank continues its plan to quash high inflation.

Meanwhile, while there has been plenty of panicked headlines telling us of plunging property values.

Yet the reality has been that the 2022 property market is merely adjusting to the extraordinary figures of 2020-2021.

It's true that as of November 30, Sydney and Melbourne experienced annual price declines of -10.6% and -7% respectively, according to CoreLogic figures.

Yet significantly, half of our capital cities - namely Brisbane, Adelaide, Perth and Darwin - have continued to see annual price growth of between 3.3% and 13.4% in 2022.

This also goes for all of our states' and territories' regional areas which saw rises of between 1.1% in NSW and 18.9% in South Australia.

And in great news to end 2022, CoreLogic research director, Tim Lawless, noted in his last monthly Home Value Index (HVI) for the year that the rate of national property declines was easing.

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards
smaller value falls," Mr Lawless said.

"However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched."

Household balance sheets have certainly been a concern in 2022, with higher energy bills alone causing stress this year as prices rise, to say nothing of less bang for your buck in your supermarket trolley.

But there was some small good news regarding inflation at the end of the year.

The monthly CPI indicator dropped to 6.9% as of the year to October, according to the Australian Bureau of Statistics (ABS), which while not brilliant, was still better than expected especially after the 7.3% figure we saw in September.

This figure was the highest in more than three decades, says RBA.

The central bank still hopes for CPI inflation to drop to around 4.75% over 2023 and a little above 3% over 2024, Dr Lowe said in his November cash rate announcement.

So, another drop of 2.15% should see us on target in 2023.

What should I expect in 2023?

• RBA cash rate rises to ease, possibly altogether
• Market to continue to adjust
• Cost of living expenses to ease

“There is still the possibility that the pace of declines could reaccelerate, especially if the current rate hiking cycle persists longer than expected," Mr Lawless said in his December HVI report.

"Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire."

We believe Mr Lawless' cautious approach is fairly reasonable.

Certainly, so much depends on how far the RBA will go in raising cash rates.

Even the changing cash rates of 2022 have strongly lessened potential buyers' borrowing capacity and especially so amidst the rising cost of living stresses.

Dr Lowe certainly acknowledged that Aussie mortgage holders had done it tough this year but at the same time, he believes they've yet to feel the full effect of 2022's eight rate rises. 

He also admitted to 2023 being an economically uncertain one, which meant there was a "range of potential scenarios" ahead of us.

"The path to achieving the needed decline in inflation and achieving a soft landing for the economy remains a narrow one," Dr Lowe said.

At the same time, there are plenty of buyers who still want to buy property - and are doing so swiftly and for higher prices than you'd think.

As I've mentioned before, Brisbane homes - even those smaller townhouses and units - are selling within a week or two.

As always, I like what Michael Yardney from Metropole has to say about the property market:

"Strategic investors are not fazed by this stage of the cycle, they understand real estate is a long-term game and they’re more focussed on the long-term rise in values rather than short-term slumps."

Mr Yardney adds that RBA may continue its rapid tightening cycle in order to quash inflation increases. 

Such rising rates have already seen fixed rates - and now variable mortgage rates now - "lifting minimum repayments significantly and reducing borrowing power".

"On the other hand, the return of immigration, falling unemployment and rising wages as well as rising exports and a strong economy will be supportive factors," Mr Yardney says.

"Spring will follow winter, and summer will follow spring - this too shall pass by and the long-term upward trend of the value of well-located properties will continue."

So, what’s next for me and my loan?

No one has a crystal ball to 100% guarantee what the future holds for you and your loan - or your potential purchase in 2023.

Yet, whatever you decide to do in 2023, we’re always happy to help you so get in touch with us today. 

We can find you the best home loans from more than 40 of Australia’s biggest banks and specialist lenders and we can also help you refinance your loan to help you keep more money in your pocket.

So, give us a call today at Lending Loop - and may your new year be a wonderful one!