Australian Market Solid To Strong In Most Areas Outside Quieter Sydney & Melbourne.
ABC News spoke to a number of industry experts to see what they believe the new year has in store for the property market. While the pundits agreed that Australia’s real estate boom is over, it’s definitely not all doom and gloom.
CoreLogic’s head of research for Australia, Cameron Kusher, said that the heat has certainly come out of the market. “At a national level I think that values will be lower, and that will really be driven by Sydney, the areas surrounding Sydney and even, potentially, Melbourne later in 2018. To the end of November Sydney prices were already down 1.3 per cent and I think by the end of 2018 we could see them down as much, potentially, as 5 or 6 per cent in some regions.”
Mr Kusher cited tighter home lending restrictions, fewer investors and more properties on the market as the main reasons prices will continue to soften, potentially resulting in double-digit peak-to-trough falls over the next couple of years.
“It could be as large as 10-15 per cent in Sydney, probably not quite as severe in Melbourne … you could see a 5-10 per cent fall in Melbourne coming over the next few years,” he said. However on a more positive note, he also speculated that after an extended period of price falls, Perth’s property market looks set for a flat year in 2018. “It does look like maybe the bottom has been reached in Perth,” he said.
Mr Kusher predicted modest growth for Adelaide and Brisbane, slowing to moderate growth for Canberra (2-4 per cent), and Hobart to remain the strongest market, albeit slower than its double-digit hike in 2017. He believes some of the strongest markets will be outside the capitals, especially in “sea change” and “tree change” regions along the east coast and Tasmania, with retiring baby boomers “100 per cent” a “big driving force” behind the price jumps in some regional areas.
Managing director of SQM Research, Louis Christopher, is more optimistic about the short-term market outlook, particularly for Sydney, and is forecasting a stronger national average of 4-8 per cent growth. “There will be some variation there,” he said. “Our most bullish scenario for a capital city is Hobart, where we believe the market will rise somewhere between 8-13 per cent.”
He is forecasting modest to moderate price growth everywhere else: Adelaide 0-4 per cent, Perth 1-4 per cent, Darwin 1-4 per cent, Brisbane 3-7 per cent, Melbourne 7-12 per cent and Sydney 4-8 per cent.
New Zealand Market Affordability Remains Variable Across The Nation.
In New Zealand property news, Interest.co.nz’s Home Loan Affordability Reports for December show that first home buyers in Auckland and the Waikato would have found it a little more difficult to get into their own homes at the end of last year while those in the Bay of Plenty, Wellington and Canterbury would have found it a little bit easier.
The reports show affordability improved in six regions, worsened in six regions and remained static elsewhere in December, as a combination of slightly lower mortgage interest rates and some fickle price trends produced a mixed bag of results across the country.
The reports track monthly movements in mortgage interest rates, the Real Estate Institute of New Zealand’s lower quartile dwelling prices and median net pay for couples working full time, to measure changes in housing affordability throughout the country.
An interesting aspect of the December reports was that lower quartile prices declined or remained unchanged in several areas where the market has been the hottest, such as Bay of Plenty, Hawke’s Bay, Wellington and Manawatu.
Early 2018 indications are that buyers and sellers seem less concerned about the change in the country’s political leadership and general economic conditions, resulting in lifting regional and total listings and busier Open Homes in most markets.
Industry commentators predict this increase in activity will become more pronounced as schools return and the country settles into a new working year.