So, you've made the decision to invest in property this year.
Yet is 2023 a smart time to enter the Landlord World - or to continue your time in this sector?
Let's look at your investment prospects for 2023.
Yes, very much so - but watch your back, warns CoreLogic's research head and report author, Eliza Owen.
This warning comes after 2022 saw:
This "extremely tight" rental market is largely due to a combination of low rental supply and rising rental demand, thanks to a strong rebound in net overseas migration, according to CoreLogic's final Home Value Index for 2022.
The group's warnings of this tight sector continued in its January 2023 Home Value Index report, with similar reasons for such results expected to continue this year.
Firstly, expect the property market overall to continue to change and adjust, (particularly as the Reserve Bank of Australia will most likely continue to raise the national cash rate in 2023) - and don't panic when it does!
As Metropole director, Michael Yardney, points out - and we agree! - while our markets are correcting, they're not going to crash.
It's also important to remember that there is not just one Australian property market, but rather, multiple markets within each state, city, and region, Mr Yardney highlights.
And most importantly, don't get caught up in the now common FOBE emotion (fear of buying early - and seeing property values fall), as opposed to 2021's FOMO (fear of missing out).
An excellent example of market corrections is the very slight, rental decline that the latter part of 2022 experienced, according to CoreLogic's Q4 2022 Quarterly Rental Review.
This trend was led by Canberra, Darwin, and Adelaide where quarterly rent rates slowed between -0.7% and 1.4% in the December 2022 quarter.
At the same time, most regional markets continued to enjoy a quarterly rent uplift.
If you're still unsure about investing in 2023, you're not alone.
It's a time of weak confidence among property investors, Ms Owen said - and this is despite an increase in rental demand from a growing number of international visitors.
CoreLogic is certainly uneasy about what 2023 will bring to the property investment sector, with Ms Owen warning the sector could experience a "not entirely clear" rental market this year.
For example, Ms Owen said the rental rise slowdown in late 2022 could be a sign that the rental market is starting to shift in tenants' direction.
Alternatively, the change could be due to a seasonal lift in rental stock combined with affordability constraints.
Certainly, December 2022 saw the highest volume of new advertised rental listings across the country (as counted by CoreLogic) since mid-February.
However, Ms Owen pointed out that these high figures (50,867) were still -13.8% lower than the previous five-year average for this time of year.
As well, with another seasonal uplift in advertised rents expected in January and February, rental growth could ease further.
At the same time, tenants shouldn't expect great news just yet, with rents still rising in most capital cities, as well as regional areas, and vacancy rates staying low.
Here's what CoreLogic is expecting to see in the property investment sector in 2023:
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