The hidden property market boom

Despite all the talk about falling property prices, there’s a property market boom taking place where prices have risen by over 10% in the last year, with even stronger growth forecast.

This a hidden boom, that no one is talking about - yet.

The latest data from PropTrack shows that median housing prices fell in Sydney by 0.5% and in Melbourne by 0.4% during June.

The most dramatic falls, however, have been taking place at the top end of those markets.

These dramatic price falls are unwelcome news for homeowners in those suburbs, but they are also dragging the median housing price for Sydney and Melbourne down with them.

This is because the median measures the middle point of all sales, so price falls at the top end pull the median price for the whole city down.

Why is there a hidden property market boom

Those falls in expensive suburbs completely hide the fact that prices in the most affordable locations of Sydney and Melbourne are booming.

House prices have shot up by more than 10% over the last year in many suburbs of Sydney’s Campbelltown, Penrith and Blacktown cities, and also in suburbs located in Melbourne’s Melton, Hume and Wyndham Vale cities.

The cause?

There’s been a dramatic surge in the number of first home buyers taking advantage of the government’s 5% deposit scheme.

According to Housing Australia, more than 300,000 Australians have now purchased their first home through this scheme.

How long will this hidden boom last?

Although 300,000 seems like a huge number, according to the ABS it’s only 5% of our population aged between 20 and 34.

There’s no place limits in the scheme, so the number of first home buyers with 5% deposits is expected to skyrocket over the next year.

Where will they buy?

First home buyer demand will surge In suburbs where house prices are currently sitting well below the scheme’s buy price caps.

In fact, with so many aspiring first home buyers competing, prices in some of the most affordable suburbs are likely to keep rising until they reach the price caps.

An opportunity not to be missed

Buying conditions have not been better for years, and the imminent influx of an army of first home buyers presents you with a once in a lifetime opportunity.

How?

Find a dwelling that needs a little work, do a quick renovation and sell it when prices have gone up enough to maximise your profit.

There are no issues with negative gearing and all the buy, hold, sell and reno costs can be claimed to reduce your CGT.

But before you start, you need to be sure that the suburb you choose has properties with enough uplift in value from renovation to cover your buy, hold, reno and sell costs and leave you with a tidy profit.

In addition, not all suburbs will perform in the same way, with some generating very little market driven growth while prices in others could double in the next few years.

Choosing the right suburb is crucial for your success and to make it easier, our highly accurate predictive database has found them for you.

About John Lindeman John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.