Well it’s Spring– traditionally a time when there are more home buyers and sellers in the market
But what’s going to happen to our property markets this year?
Are we going to get double digit growth next year like some commentators are suggesting?
Are sellers going to return?
Are the low interest rates going to bring more buyers back?
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Are banks going to become more friendly?
If you’re a home owner or property investor you’ll also want to know what’s likely to happen to the value of your property, so to help you become better informed let’s hear the thoughts of Australia’s leading housing economist Dr. Andrew Wilson, chief economist of MyHousingMarket.com.au more give us his thoughts on what’s ahead.
And at the end of this video you'll hear Andrew's State by State picks of better performing areas
The World economic environment
- More volatile than at the beginning of the year
- China US trade war
- USA – Iran issues
- The Fed cut interest rates – not worried about US recession – taking insurance
- Miracle election
- APRA loosening their grip
- Tax cuts
- 2 rate cuts (June July) and 2 more likely (Nov and Feb)
- High underemployment – rising participation rate – keeping wages growth low
- 5 percent unemployed or underemployed – little wonder our wages growth is slow
- Businesses having a tough time – esp. retail – confidence poor
What is the likely impact of the rate cuts on our property market?
- More confidence
- In the past these type of auction clearance rates have meant double digit capital growth – unlikely to be the same this time
- Banks a lot tougher in their lending practices
- Still a lot of new apartment stock to hit the market – particularly Melbourne and Sydney
- The spectre or rising unemployment – esp in the construction and retail industries
- Low single digit capital growth next year.
Auction clearance rates
- Running in the 40’s at the end of last year – now 70’s
Factors affecting our property market moving forward
- Finance – cost and availability
- Consumer confidence
- Wealth effect – many in Sydney and Melbourne saw the value of their most valuable asset – their home drop and this made them curb their spending Rate cuts and tax cuts may compensate a little for this
- Supply and demand
What’s ahead for the Spring Selling Season?
- Traditionally a period of higher activity
- In Melbourne the best performing locations will include the eastern middle ring suburbs
- In Sydney the inner east, Lower North Shore, inner West and Northern Beaches will perform strongly
- In Brisbane well located properties close to transport and within 5 – 7 km of the CBD should outperform
- Well located Adelaide properties should keep growing next year
- Perth will continue to have flat or falling property prices for some time yet.