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2018 is going to be a very different year in property, so today we are going to discuss what is happening in each state around Australia and what you can expect to happen in our property markets.
2017 started with a bang and ended in a whimper.
In the middle, foreign investment slowed down, we embraced stamp duty, and hiked land taxes. Other disincentives were given to foreign investors and APRA slowed down lending.
Over the last property values rose 5.5 percent across all the combined capital cities.
As always, the property markets were fragmented. Only Melbourne and Hobart record value growth over 10%. Perth and Darwin's property values decreased.
Once a year I conduct a series of seminars around Australia, and I will be joined by Dr. Andrew Wilson, Ken Raiss, and local property experts. If you would like to attend for free use the Promotion Code Podcast at https://propertymarketupdate.com.au/
Today's discussion includes:
An update on the following:
Sydney Property Market with Ahmad Imam
- There is still good upside for investment grade properties
- The market sentiment is subdued and investors are holding
- Invest for long term capital growth and consider borderless investing
- Prices in Sydney should rise this year, but not as much as the previous 12 months
- You can't expect the same level of growth that we had over the last 4 or 5 years
- There will not be growth in secondary locations. This is a time to focus proven stable locations.
- People are looking at better class assets – a flight o quality.
- There is much less competition for the A grade assets because people are holding.
- Select the right location in the middle rings of Sydney and then find the right property there.
Melbourne Property Market with Kate Forbes
- The fundamentals haven't changed – we'll have another good year in property.
- Last year we had 144,400 new residents.
- There are not a lot of vacancies – vacancy rates are around 1.8%
- The Melbourne property market grew by 10.1% last year
- Finance availability is cramping the number of people that can get into the market.
- Foreign investors have slowed because of finance challenges and new taxes.
- The introduction of a "Window Tax" for properties that have been vacant for six months.
- Will this lead to owners putting them on the market.
- Invest for the long term especially in the inner to middle ring affluent suburbs that are built out and have a reasonable supply cap.
- Growth corridors did well last year. As the markets are slowing these buyers will have more difficulty.
- As things slow down there is a flight to quality.
Brisbane Property Market with Brett Warren
- Brisbane property had an overall growth of 2.45% last year, pulled down a bit by the apartment market.
- But there was solid growth of some housed - even 10 and 15% growth in superior locations
- You need to buy the right property in the right location to outperform the markets.
- Jobs and employment bring certainty and higher demand for housing.
- The Gold Coast may be a good market in the short term, but it is volatile and influenced by tourism.
- There is not enough job opportunity for long term growth on the Gold Coast. 60% of jobs in Queensland are around Brisbane.
- The demand for property will be where the jobs will be.
- Brisbane doesn't have urban sprawl and job opportunities in the outer suburbs.
- Buy in superior locations where all the boxes are ticked and demand is fairly high.
Other Major Capital Cities of Australia
- Adelaide is still speculative. There weren't a lot of growth drivers like jobs.
- Perth hasn't bottomed yet. Sales volumes are down, but people are still waiting to see if it hits rock bottom. Significant oversupply of apartments in Perth.
- Hobart is still Australia's most affordable capital city. The market is very small. This years hot spot can be next year's not spot.
- Darwin is still suffering from the effects of the end of the mining boom.
- Cenberra is a two tiered market. Detached homes rose, but apartments are holding back. The population should grow 6% by 2020. It may not be a good place to invest because of the large land tax.
- There are some regional markets which are also growing well.
The Property Markets of 2018
- The market needed to calm down. The growth wasn't sustainable.
- There won't be a bubble or crash in 2018.
- There should be more of a soft landing.
- Hobart should be the hottest market encouraged by speculators – so it's one to avoid.
- Melbourne should be the second best performing market.
- Canberra will also be a steady performer. Avoid the apartment market.
- Well located homes in Brisbane should do well.
- Adelaide should underperform the other cities.
- Perth is near its bottom.
- Darwin property values will continue to drop.
Links and resources:
- Michael Yardney
- Metropole
- Rich Habits Poor Habits
- Property Update App
- APRA
- Dr. Andrew Wilson
- Ken Raiss
- Ahmad Imam
- Kate Forbes
- Brett Warren
- My National Property Market and Economic Updates : http://propertymarketupdate.com.au Use Coupon Code: Podcast
Quotes:
"2017 was also the year when first time home buyers came back. There were more than 94,000 first time homes bought across Australia." Michael Yardney
"There was also a significant oversupply of apartments in the capital cities in 2017." Michael Yardney
"2017 was also the year that headlines in Sydney changed from boom to flat lining and doom and gloom." Michael Yardney
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