Cash will play bigger part in housing market

After a period where cheap money has boosted a lot of property buying, the next year or two could see activity slant towards those people who have been in the market longer, but who also feel comfortable keeping or increasing their debt levels - at a time when mortgage rates are rising.

CoreLogic’s latest Buyer Classification Report says observers of the housing market will be aware an abrupt change is underway, with poor affordability, higher mortgage rates, and tighter credit availability all weighing on property sales volumes and prices.

“Part of that also seems to be a mindset change, with vendors not necessarily waiting for multiple offers anymore, and credit-approved buyers feeling a much stronger degree of pricing power,” says Kelvin Davidson, CoreLogic senior property economist.

In terms of overall sales volumes this year, CoreLogic’s forecasting model points to a drop of about 5% from 2021 levels, to a total of about 91,200, before a further fall towards 88,500 in 2023.