Australia's housing market is going to struggle with fixed-rate mortgages in 2023
The slump in Australia's real estate market, recorded after the COVID-19 pandemic, is likely to worsen next year. This is due to the need to cover mortgages taken in 2020-21, when interest rates reached their all-time lows. So, borrowers are being forced to refinance their loans at extremely high interest rates.
Home loan payments have now hit $370 billion ($245.79 billion). This indicator may rise by another two-thirds. But real incomes have been shrinking amid soaring inflation in the country. These factors seem to be weighing on housing costs in Australia, as well as consumer spending, which is seen as a key driver of the economy.
Home values in Sydney have fallen 12% this year. Eliza Owen, head of research at CoreLogic, said that the level is likely to keep sliding, since the number of properties for sale is growing.
The expert mentioned that most borrowers will be able to pay off their mortgages. But if there is a rise in arrears, being at a record low at the moment, the real estate market is going to see a supply upturn.
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