Past several years were very interesting when it comes to property trends in Australia. The prices were on a constant rise and the growth rate was quite high, surpassing most expectations. Having said that, it might be difficult to predict what 2018 will bring, but based on some indicators, it’s safe to assume that the trend will continue, but at a slower pace.
This general prediction is founded on the fact that we’ve now moved into the next phase of the property cycle and that we are likely to see some kind of stabilisation of house prices, accompanied by a drop in auction clearance rate and lending to investors. Here’s a more detailed analysis of some trends that will most likely dominate the property market in Australia.
It’s quite probable that we won’t see the amazing price growth that was recorded in places such as Sydney and Melbourne over the past five years. This prediction seems realistic, since the official RBA interest rate is most likely going to remain unchanged at 1.5% this year. The economic growth is simply not strong enough to justify an increase in the interest rate.
Even though the unemployment rate has decreased, mainly due to the fact that many jobs have been created, the growth in wages and retail sales is still slow. Consequently, the RBA should not feel the need to slow the market by increasing the rates.
Predictions for big cities
If no major change happens, we are probably going to see the Sydney property market remain strong, even though some predicted a crash. Such predictions are often made when a market starts running out of steam, but there will definitely still be a demand for experts, such as those from White Square Properties.
Melbourne, on the other hand, is expected to record an impressive growth of up to 10%, while Brisbane will continue to develop its infrastructure, which will be reflected in the performance on the local market. Hobart, seen by many as the next hotspot, will most likely see a decent growth, while Canberra is expected to continue developing at the constant rate, despite the excessive land tax. Other places, such as Adelaide, Perth and Darwin, will not experience any major change in 2018.
Job and population growth to rise further
With well over 300,000 jobs created in 2017, one can safely assume that the trend will continue in 2018. This is accompanied by the similar growth in the population of Australia, which has also led to increased demand for housing. The logical consequence of these trends was the big growth in the price of properties, especially in the most attractive locations.
The huge increase in population is mainly due to overseas migration, which accounted for about 60% of the total population growth. New South Wales, Victoria and South Australia welcomed the highest number of immigrants, who needed to resolve their housing issues. That’s why those areas have recorded the biggest increase in the price of real estate.
The Shift of focus
Those with less experience invested during the last few years in almost any property they could afford, guided by the price alone. This strategy paid off almost in every case, because the market was growing at a high rate. Still, when the growth slows down, the focus gets shifted onto quality and location. Properties offering high quality and attractive location will remain very popular and in demand in 2018.
When a market slows down, many players leave it and seek new pastures. The property market in Australia is not an exception, and we are likely to see many investors changing their focus. This is particularly true when it comes to those who wish to make a great profit by selling.
However, strategic investors will realise that this is the right time to buy property, especially because there will be less demand than in the recent past. That would mean the competition won’t be that fierce and their investment is probably going to be worth much more, although it’ll take some patience to wait for that moment.
As you can see, Australia will remain a very attractive destination, although the growth rate of the property market from previous years probably won’t be reached. Still, this means that those wishing to buy a property should do it now, since they’ll have more options to choose from.