May 2023 Market Update | What You Need to Know Now

May 2023 Market Update | What You Need to Know Now

Sydney Property Market Update

Sydney property market is now improving – why?

Sydney’s property market experienced strong growth in 2020 and 2021, driven by low-interest rates, government stimulus, pent-up demand, and limited supply. Sydney housing values reached a record high in January 2022, but then started to decline as the market saw higher interest rates, tighter lending standards, affordability constraints, and reduced investor activity. Sydney housing values fell 12.3% from their peak in January 2022, making it the worst-performing capital city in Australia. However, it seems the Sydney housing market has turned the corner and is showing signs of recovery. All major research houses, such as CoreLogicProptrack, have reported an increase in Sydney house and unit prices over the last months. The increase was mainly due to improved consumer confidence, increased buyer activity, lower stock levels, and renewed migration. This creates a window of opportunity to get into the property market as the Sydney market picks up again. Buyers who act now can take advantage of lower prices before property values increase further, less competition from fewer buyers, and more properties coming onto the market.

Sydney Property Market Prices April 2023

Source – OpenAgent

Latest on Interest Rates

In May 2023, the Reserve Bank of Australia (RBA) increased interest rates by 0.25%. Lenders have already started passing this increase on to variable-rate customers.

Interest rates move in cycles, with periods of low-interest rates that we saw during 2020 – 2022 and periods of higher interest rates that we are currently seeing. One thing is for sure: when there is uncertainty in the market, there comes great opportunity.

Periods of lower interest rates make borrowing cheaper and more attractive for home buyers and investors as they decrease the cost of mortgage repayments and increase the disposable income of households. This is generally when property prices increase.

Periods of higher interest rates create uncertainty and reduce the demand for housing as they increase the cost of mortgage repayments and reduce the disposable income of households. While loan repayments are high and everyone is concerned about how high-interest rates will go, any purchase of an asset like property is a long-term investment.

Many customers are already taking advantage of the current situation by taking advantage of reduced house prices and getting into the market, refinancing to a lower interest rate, and taking advantage of current cashbacks in the market or simply upgrading.

Where are Interest Rates at?

Subject to change, adjusted to take into account the May 2023 rate rise, based on a 60% loan-to-value ratio, principal and interest repayments. Correct as of 15/05/2023.

Home Loans

Variable Rate – 5.24% p.a. (comparison rate of 5.24% p.a.)

1-Year Fixed Rate – 5.39% p.a. (comparison rate of 6.73% p.a.)

2,3,4,5 Year Fixed Rate – 5.29% p.a. (comparison rate of 5.52% p.a.)

Investment Loans

Variable Rate – 5.54% p.a. (comparison rate of 5.55% p.a.)

1,2,3,4,5 Year Fixed Rate – 5.49% p.a. (comparison rate of 5.80% p.a.)

Both Paul and Ryan are happy to discuss your property and loan requirements.  Please use the link below to book an appointment with us.

Should you now fix your interest rate?

“Fixed or variable?” is a question that we receive on an almost daily basis. There really isn’t a simple answer because nobody can predict the future of interest rates. Ultimately, you have to choose between fixed and variable rates based on your short-term and future plans.

Why are fixed rates now lower than variable rates?

Fixed rates can sometimes be lower than variable rates due to an inverted yield curve. This indicates that the market believes rates will be lower in the future than they are now, meaning long-term debt that backs fixed rates becomes cheaper for banks than the short-term debt that backs variable rates. An inverted yield curve occurs when short-term debt instruments have higher yields than long-term instruments of the same credit risk profile. It reflects bond investors’ expectations for a decline in longer-term interest rates.


If you are worried about your mortgage repayments, we are more than happy to sit down with you and work out repayment strategies and plans, review and negotiate with your lender.

We are here to help!