2023 Property Predictions
2023 is set to be a really mixed bag as far as the economy and property prices are concerned…
Let’s start with the headline of property prices.
- In 2022 prices still rose overall despite all the negative news and this was made up of strong rises at the beginning of 2022 and slower growth at the end.
- This trend will continue – and then reverse during 2023.
- The market will start slow and take a while to get going but then will pick up in the second half of the year mainly due to an improving economic situation.
Property prices will start to pick up as mortgage availability improves. The finance providers have already started to reduce rates and longer term, 5 year fixed interest rates are now lower than 2 year fixed rates showing that the market overall expects rates to come back down longer term.
In the next quarter, mortgage rates will stabilise as will lending criteria and property buyers and sellers will start to come back into the market and as with all market activity prices will start to climb, although the full effect of this won’t really be seen until the second half of the year.
However, supply will continue to fall far below demand for both buying and renting properties so it’s likely this will keep property prices from falling too far and rents are likely to continue to rise.
The economy ended 2022 on a negative note, but there are already signs that the economy is stabilising and overall, the latest governmental changes with Sunak and Hunt have been seen as a positive step for the economy.
Where does this leave us?
Well, basically 2022 won’t be much different from a normal year where property prices stagnate in the first quarter and then start to pick up when spring arrives! In the main though the pick up is likely to start a little later than normal and won’t be quite so dramatic.
Then somewhere towards the second half of the year we will see inflation falling, the economy picking up and property prices start to climb as normal.
For property investors this is a great cycle – we can buy cheap in the first half of the year, refurbish and then sell in the second half of the year when prices start to rise. Meanwhile our rental properties will continue to attract premium rents.
In summary then – a PERFECT year to be a property investor.