According to forecasts from SQM Research, the Reserve Bank of Australia may undergo three more interest rate hikes, potentially impacting the real estate market. Especially in the Sydney region, there might be a risk of a decline in property prices.

Over the past year, property prices in the Sydney area have risen by 10%, notably in areas such as the Northern Suburbs, Western Suburbs, and near the city center, which have seen double-digit increases in detached house prices.

However, concurrently, prices in the southwestern outskirts have begun to decline, with areas like Cecil Hills experiencing a 4.2% decrease. According to SQM Research's predictions, if the Reserve Bank of Australia implements three more interest rate hikes, Sydney's property prices might fall by 2% to 6% in 2024, presenting a challenging situation.

Experts, including Louis Christopher, point out that as property prices rapidly rise, the pressure on homebuyers is also increasing. For instance, a couple with a 20% down payment but needing to repay an AUD 800,000 mortgage would require an income of at least AUD 133,000 to avoid mortgage stress.

This situation is proving difficult for many working individuals. Simultaneously, a substantial drop in property prices is bad news for current mortgage borrowers as they may owe the bank far more than their property's value, leading to negative equity.

In addition to Australia's monetary policy, factors such as immigration and unemployment rates will also impact the real estate market. Australia's net migration levels have hit new records, partially driving the increase in property prices. However, the rising property prices in some areas might not be sustained, as this is a combined result of net migration and natural growth. Furthermore, an increase in the unemployment rate can have adverse effects on the real estate market.