Seven PREDICTIONS for 2023 - Australian Housing Market & Economic Update 🔮

2022 was a year of high inflation, rocketing interest rates, and mainstream FEAR 😱

What will happen in 2023?

In this video I share Seven Predictions for the Australian Housing Market & Economy 🔮

I strip away my own opinions and let the data do the talking.

Check out these Seven Charts that Family Offices and Sophisticated Investors are reviewing to make their investment decisions 📈

The facts may surprise you! 👀

0:00 - Intro
0:59 - Australian housing saving & deposit ratio.
3:25 - National flight to affordability.
4:45 - Household mortgage Pre-payments.
6:50 - Job Market
8:25 - Building cost index
11:35 - Net Overseas Migration
14:19 - World economy
17:00 - Conclusion

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#PropertyInvestment #PassiveIncome #Australia #RealEstate

[AusPropertyMasteryWithPK]

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[NoWa]

The biggest driver of market growth over the past few years was cheap money for investors or buyers. This is changing. That’s the one factor that is going to weigh on the property market over the next few years.

[Bomberboybrad]

You make a great case for why the RBA will need to raise rates much higher than the 2 forecast to tame inflation. A strong economy will not allow inflation to drop to the target range any time soon.

[onyoursideinvestments]

Agree fully. Best data pack I've seen to support 2023 growth expectations I expect to be strong in Brisbane then Adelaide

[davidbrayshaw]

Thank you for your presentation. Much of the analysis presented, I don't disagree with at all.
That said, however, there are a couple of points that I would like to raise.
Firstly, the effect of interest rates. You have provided good evidence as to why we should not be too concerned about mortgage defaults as they are likely to only affect a relatively small percentage of home buyers. In that context, I believe that your assertion is correct, certainly in the short to medium term, at least.
I do believe, however, that with rising interest rates, investors are much more likely to "park" their money elsewhere, if they're cash buyers. A 4.95% term deposit rate (Judo Bank) certainly has a lot of appeal to it when compared to a 2-3% taxable return on an average apartment in one of the major cities. Higher deposit rates also become a very attractive alternative for those who are speculating on capital gains in land. A guaranteed 24.75% income over five years is hard to overlook.
At the same time, those that may have been happy for a tax deduction via negative gearing, mightn't be too happy to have such a large tax deduction as rates rise. It's my belief that "middle income" earners are starting to watch every penny, tax deduction or otherwise. It is also my belief that the higher cost of living that we are experiencing is diverting household funds from
prospective investments and back into the larder to cover day to day expenses.
And while household savings have screamed up over the past two years, so has household debt.
I'm not quite convinced that there is as much liquidity in the market as suggested. Lots of tattoos, lots of Uber eats, lots of shiny cars and motorcycles...yes. Just not a whole lot of house deposits waiting to be spent.
I'm the first to say that no one can predict the future, myself included. And I'm also the first to echo the old cliche that time in the market beats timing the market. That said, however, for the first time in many years, there are viable alternatives to investing in housing. Of course, I'm talking about investing. There's no time like today to buy if you need somewhere to live.
Thanks for your content.

[MS-vlim]

so you are saying we have nearly $1.5 Trillion of deposits? That doesn't sound right, that's nearly Australia's GDP. You need to look at household debts vs deposits (net) to tell the whole story. Also a suggestion for the future: reference your data source.

[kobryant]

That fact you still thought Sydney & Melbourne market will go up end of last year speaks for itself... doesn’t matter what happens you will always be bullish on the property market.

I respect that this is your income source.

[jessicaamy]

Bro, literally everything you said is exactly what I have been saying to doomsday estate agents and the like. House prices in some areas will be buoyed by rental demand and increases which will incentivise investors which will in turn drive the housing market back up or keep it stable. We will for sure see declines but not a crash. I will show your video to anyone willing to watch!

[wiltshire]

Wow.. some really good charts/analysis. Thanks

[peterosmotherly]

Very well articulated

Very much enjoyed your data

[williamcrossan]

Right at the moment, late December 2022, many sectors of the economy are going gangbusters.
Certainly interesting times.

[dsinghr]

You referred to huge increase in intake but the figure you mentioned (200k ?) is the cap. In the past many years, the cap has never reached. The actual number of people invited via a PR is way less than the cap. As a data enthusiasts, you should be knowing that.

[wandilekhumalo]

What would your advice be to new immigrants entiring Aus? Is getting property in let's say a regional area affordable?

I'm a Professional who would most likely work in Mining, Construction or Groundwater supply. I've just been reading on how tight the Housing Market is so I would like to prepare myself.

Kind Regards

[gray]

Wait till less people are using short term accommodation (Air bnb. etc) and housing investors start selling their investment properties. Massive bubble to pop with a domino effect in selling. This could happen around the interest rate pivot. Possible 40% drop in property prices coming.

[cryptokobe]

My Man PK thanks for always dropping us with valuable knowledge you are truly appreciated Keep Crush Brother! Passive Income is Massive Income!

[liamhescock]

I’m not a pessimist, but you didn’t touch on any reason why prices would fall/are falling? Would be nice to see both sides, (remove your incentive bias)

[AussieZeKieL]

Your data backs-up what I've been saying all year; More interest rate rises to come.
People don't seem to understand that while everything is good and the economy can handle higher interest rates, then inflation is not coming down. Eventually we will get to a breaking point. I think it will be start of second quarter next year. we'll see...

[CK-fjql]

Great analysis PK, it would be interesting to look at some stats around home affordability. I think that feeds into your thesis that the lower price properties are probably are more attractive investment at the moment.

[raghavegupta]

Love your videos PK. I've bought my first property which is negatively geared right now because of crazy interest rates. I'd love to learn about how and when to buy my second property?

My first property was bought in Ipswich for $510k in August and just got a valuation for $560k, how can I leverage this to get approved for a second loan?

[nitinverma]

Thanks PK.
Why does it seem that you only captured one side of the coin? Are there no indicators that point to a negative or no growth for 2023?
Also, with these charts, would you have been able to predict that the markets will be ~10% down in 2022?

Please note that I am not saying that markets will not perform the way you said in the video..:)