» market update

What to expect as a property investor in 2020

BMT team — Wed, 15 Jan 2020 03:00:05 +0000

We reflect on how the Australian property market fared in 2019 and delve into what investors can expect to see in 2020. Property investment 2019: the year of highs and lows Property investment 2020: a steady year ahead Property investment trends: what are investors buying? Property investment 2019: the year of highs and lows It’s safe to say 2019 was a year of highs and lows for Australian property investors with the national housing market getting off to a slow start. Investor sentiment was low as policy uncertainty, the banking royal commission and a subdued economy overshadowed the market. Tighter lending conditions effected loan approvals, and property values plummeted. However, the National Dwelling Index reached its turning point in June when Sydney recorded a slight rise of 0.1 per cent, the first monthly increase in the city’s housing values since its peak in July 2017. The Australian housing market moved through one of the largest and longest corrections on record followed by a fast-paced and surprising rebound in values in the second half of the year. House prices in most Australian cities finished on a high with national average dwelling prices lifting 1.1 per cent during December and by 2.3 per cent over the year, according to CoreLogic. A variety of factors are contributing to the recovery including three cuts to the official cash rate with the potential for further reductions, the removal of uncertainty around tax reform following the federal election result, and low advertised stock creating a sense of urgency among buyers. Property investment 2020: a steady year ahead This year is likely to be steady for investors with markets potentially plateauing mid-2020. Smaller cities are starting to show a stronger growth trajectory, including Perth, where housing values have been trending lower since mid-2014. With the cash rate at 0.75 investors will be able to secure credit at a reduced rate, however the ongoing repercussions of the banking royal commission could negatively affect the banks’ ability to lend finance. Unit and apartment sales continue to trend lower, and developers may be retaining stock as a result. Slowed development will have a flow-on effect on the construction industry and is likely to put pressure on property prices as housing stock is reduced despite demand remaining high. Across the states and territories, dwelling approvals fell in the Northern Territory (11.1 per cent), New South Wales (4.6 per cent), Queensland (1.4 per cent), and Western Australia (1.0 per cent), according to the Australian Bureau of Statistics December data. Tasmania (4.5 per cent), South Australia (3.1 per cent), Australian Capital Territory (3.1 per cent), and Victoria (1.3 per cent) recorded increases, in trend terms. To compound the issue, figures from the Performance of Construction Index, a monthly barometer of industry sentiment, showed that overall activity in apartment construction and new developments contracted for a 20th month, even as the pace of decline eased. Along with slowing construction, the first home buyers’ scheme may also contribute to a jump in property prices in the first half of the year. Property investment trends: what are investors buying? Over the past few years, BMT has seen a consistent increase in the schedules completed for new property and this is expected to continue. Already in the 2019-20 financial year, 57 per cent of schedules completed have been for new property. It’s important for investors to understand that every property type, whether it be new or old, will attract depreciation deductions. In the 2018-19 financial year, BMT found residential investors an average first year deduction of almost $9,000 so it’s always worth consulting a specialist Quantity Surveyor to see how much you can claim. Interest in commercial property has also increased, with BMT experiencing a 9 per cent rise in the number of commercial schedules ordered. These schedules are mostly for industrial warehouses, as well as retail and office spaces. Whether you’re investing in residential or commercial property, the team at BMT wish you every success in 2020. You might also enjoy reading: Bushfires offer a timely reminder for landlords What’s happening in the commercial property market

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Property market update August 2019

BMT team — Mon, 12 Aug 2019 04:12:15 +0000

Australian property market set to stabilise The property market continued to show signs of life throughout July and is tipped to stabilise by the end of the year following lower mortgage rates, improved housing affordability and increased confidence post federal election. Property values Tides appear to be turning for the Australian property market, with dwelling values holding firm throughout July, according to the latest CoreLogic Hedonic Home Value Index. Five out of the eight capital cities recorded a slight increase in values over the month. Sydney, Melbourne and Brisbane all recorded a 0.2 per cent rise, marking the first month-on-month rise for Brisbane since November 2018 and signalling a positive trend overall. Sydney house values were 0.2 per cent lower over the quarter, but unit values increased by 0.02 per cent. The latest forecast from BIS Oxford Economics is predicting inner Sydney’s new apartment market to return to balance in 2020, putting the central city back into undersupply as population growth picks up and a lack of new supply starts to push rents and prices higher. Melbourne is following a similar trend, with house values down 0.3 per cent over the three months to July and unit values up 1.1 per cent. Hobart (0.3 per cent) and Darwin (0.4 per cent) dwelling values increased over the month, while Adelaide (-0.3 per cent), Canberra (-0.3 per cent) and Perth (-0.5 per cent) declined. Regional markets remain varied. The best performing regions throughout July were in Tasmania’s south east and north-west, with New South Wales’ Riverina region also showing solid gains. On the other end of the property spectrum, the weakest regional sectors were in the outback regions of Queensland, Western Australia and South Australia, where drought conditions continue to bite. Residential property listings New residential listings are a significant 22 per cent lower than they were a year ago, while total stock advertised for sale is 3.5 per cent lower. While listing numbers are partly seasonal, recent falls are indicative of weak vendor confidence and tough market conditions. According to CoreLogic, the recent improvement in housing market conditions should support a rise in vendor sentiment as we approach spring. Vacancy and rental rates National rents were down 0.1 per cent in July, led by negative trends in Sydney, Perth and Canberra. According to CoreLogic, Sydney remains the lowest yielding market, tracking at 3.43 per cent, down from a recent peak of 3.51 per cent two months ago. The strongest conditions were in Hobart where rental prices have experienced an annual increase of 5.5 per cent. On average, Australia recorded a 0.3 per cent increase in rents over the second quarter of 2019, which is softer growth than the 1 per cent recorded in the previous quarter. Capital city rents were 0.1 per cent higher over the quarter however remain down year-on-year. Further, gross rental yields for the last quarter decreased in Sydney and Canberra, while increasing everywhere else. Auction clearance rates Combined capital cities recorded a preliminary auction clearance rate of 68.3 per cent in the first week of August. Sydney has the highest clearance rate of all capital cities, with 74.8 per cent of auctions returning a successful result. Melbourne was close behind, returning a result of 73.3 per cent. Outside of Sydney and Melbourne, auction volumes increased across all cities excluding Hobart. The latest data mirror the positive results felt throughout July. Auction clearance rates held above 70 per cent for most of the month across Sydney and Melbourne, indicating a better fit between buyer and seller pricing expectations. At the same time, advertised housing stock was reduced. The low number of houses going to auction is creating heightened competition among buyers, many of whom are eager to buy following the RBA’s consecutive interest rate cuts. Finance and interest rates The Reserve Bank of Australia (RBA) has announced its decision to leave interest rates on hold at 1 per cent following back-to-back cuts in June and July. The pause from lowering interest rates will give the RBA time to assess the economic effects of the consecutive cuts however, a further reduction is widely anticipated. Citing a weak inflation outlook and a deteriorating global growth outlook, RBA Governor Philip Lowe said, “the increased uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy remain tilted to the downside.” Along with the RBA’s interest rate call, the Australian Prudential Regulation Authority removed the 7 per cent interest rate buffer for residential mortgage lending. The relaxed restrictions eliminate the need for a ‘stress test’ on home loan applications, which typically determines whether borrowers can afford to repay residential home loans with an interest rate of at least 7 per cent. Commercial property There is healthy buying appetite at commercial auctions across the country although buyers are cautious as conditions remain tight. Capital values surged 7.1 per cent nationally, led by Melbourne and Sydney, while commercial rental yields tightened across all capital city markets except Melbourne. Along the east coast, the overall vacancy rate for industrial property declined to 2.3 per cent during the second quarter of 2019, according to analysis by Urbis. In other commercial news, agricultural property is forecast to decline as drought conditions worsen. Increased property availability and decreasing farm operating profits are expected to further slow price growth in agricultural regions in the coming eighteen months.

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Property market update June 2019

BMT team — Sun, 23 Jun 2019 23:41:33 +0000

Property values Australian dwelling values fell by half a percent during May, as the pace of decline continues to improve. According to CoreLogic’s May 2019 Home Property Value Index, Adelaide was the only Australian capital city where dwelling prices increased, with values 0.2 per cent higher during the month. While Adelaide remained firm throughout May, values were 0.2 per cent lower for the quarter. Canberra performed well, slipping by only 0.2 per cent during the month and increasing by 0.2 per cent during the three months to May. Annually, Canberra’s dwelling values have increased by 2.4 per cent. In Sydney the dwelling values slipped by 0.5 per cent, marking a 10.7 per cent drop over the past 12 months. Melbourne followed a similar trend, with values declining by 0.3 per cent in May and trending 9.9 per cent lower annually. While property values fell, the rate of decline eased considerably, signalling improvement in the market. Hobart values have tracked lower for two consecutive months, taking the quarterly rate of change (-0.7 per cent) into negative territory for the first time since 2016. Dwelling values fell in Perth also fell by 1 per cent over the quarter and Brisbane by 0.5 per cent. Darwin was the worst performing capital city, with values declining by 1.6 per cent during the month and 3.3 per cent for the quarter. Nationally, dwelling values were down by 0.4 per cent during May, the smallest month-on-month decline since May 2018. Residential listings Listing numbers remained elevated across all capital city markets, providing buyers with a diverse selection of properties and strong bargaining power. According to SQM Research, national residential listings increased by 4 per cent in May. Hobart proved to be the best performing city, with listings experiencing an upward trend of 7.1 per cent. Adelaide closely followed with an increase of 6.4 per cent and Canberra not far behind with 5.6 per cent. The only capital city to record a negative change in listing numbers was Darwin, with a yearly decrease of 1.5 per cent. While total listing numbers remain high, there are fewer new listings being advertised for sale. Vacancy and rental rates Rental rates held firm in May however annual national growth continues to slow, largely due to declines in Sydney (-2.9 per cent) and Darwin (-5.2 per cent). While the market remains sluggish, gross rental yields are recovering from record lows. Hobart has seen the highest increase in rental yields, up 4.9% over the past twelve months. According to the ANZ-CoreLogic Housing Affordability Report, Hobart is now the most unaffordable capital city rental market. This is a result of relatively low household incomes and surging rental prices. According to SQM Research, Hobart’s vacancy rate for May was 0.5 per cent. Since peaking, Sydney dwelling values have reduced by almost 15 per cent, pushing rental yields higher. Sydney’s average weekly rent for houses stands at $550, a 3.2 per cent increase, and $520 for units, a 4.1 per cent increase. Sydney has a vacancy rate of 3.3 per cent during May. Vacancy rates were also recorded for Darwin (3.3 per cent), Perth (3.1 per cent), Brisbane (2.4 per cent), Melbourne (1.8 per cent), Canberra (1.2 per cent) and Adelaide (1.1 per cent). Nationally, the vacancy rate for May was 2.2 per cent, while Australia’s gross rental yield (4.1 per cent) was the highest it’s been since May 2015. Auction clearance rates Auction clearance rates have increased and are holding around the mid-50 per cent range across the major markets following the Federal election. As the rate of decline continues to improve, there’s indication the worst of the housing downturn could be over. Auction clearance rates suffered notably in Sydney during the long weekend, despite the Reserve Bank of Australia cutting interest rates. During that weekend, only 800 properties were taken to auction across the combined capital cities, with the clearance rate at 51 per cent. Though the last week of May saw improvement, with Sydney clearance rates breaking the 60 per cent mark for the first time in over a year and Melbourne’s auction volumes holding firm. During that same week, SQM Research reported a clearance rate of 62.6 per cent across the combined capital cities. Finance and interest rates The Federal election and the Reserve Bank of Australia’s (RBA) decision to cut interest rates were the two key events that impacted housing market activity throughout May. Proposed negative gearing and Capital Gains Tax were dismissed when Coalition was re-elected and removed vendors’ uncertainty surrounding potential taxation reform. The government also introduced the First Home Buyer Guarantee, set to come into effect in January next year. The introduction of the guarantee is expected to have a positive impact on housing activity and provide stimulus for those looking to enter the property market. The RBA cut interest rates to a record low, moving the official cash rate down 25 basis points to 1.25 per cent. This cut marked the first change since August 2016. Economists are predicting a further cut to 1 per cent in the coming months. Historically, lower interest rates have generally had a positive effect on housing demand. In addition to low interest rates, CoreLogic believes accessing a home loan could become easier, with a possible reduction in the interest rate serviceability test in late June. Lower interest rates coupled with lower borrower serviceability assessments is likely to improve housing market activity. While there are signs of recovery, housing credit is increasing at an historically slow pace, largely due to tighter lending conditions. Lenders continue to scrutinise incomes and expenses and are further reducing their exposure to high-risk borrowers.

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Research reveals new housing demand hotspots

Simon Pressley — Wed, 07 Mar 2018 01:02:54 +0000

Contrary to general belief, population growth is not the biggest influence on property prices – far from it, in fact. There are a range of factors that influence the demand side of the property price equation. Aside from affordability, the biggest influence is economic conditions. Jobs. Jobs. Jobs! Propertyology’s recent analysis of national job data for the 2017 calendar year concluded that numerous locations across regional Australia may soon see considerable strength build in their property markets. In alphabetical order, Albury, Armidale, Ballarat, Ballina, Bowral, Cairns, Coffs Harbour, Dubbo, Mackay, Muswellbrook, Port Macquarie, Townsville, Warragul and Warrnambool are likely to see increased market activity over the coming year or two. A marked improvement in local economic conditions was a key driver that transformed 2011-12 property price declines in Sydney and Melbourne into boom markets over the last four years. Similarly, it’s not that long ago that Tasmania was in recession but the remarkable turnaround in its economy now sees Hobart as Australia’s hottest property market by a country mile. Sustained job growth within a community puts more money in people’s pockets, attracts new people to a region and boosts local confidence. It increases the chances of renters becoming home owners, provides home owners with confidence to renovate, increases demand for local goods and services, and gets more people at open homes. Tracking trends of job volumes is a more reliable measurement of the direction a localised economy is heading in, rather than looking at isolated unemployment rate. At a capital city level, Melbourne (10 per cent), Hobart (there it is again ~ 9.8 per cent), Canberra (8.7 per cent) have produced the largest increases in jobs over the last two years. While the measurement of job volumes is far from the only metric that Propertyology look at, it’s no coincidence that these numbers correlate with property market performance. While Brisbane is (finally) producing some encouraging employment data, inner-city jobs continue to reflect the post-mining boom pinch. The miserable 1.9 per cent increase in CBD jobs over the last two years is not the only disappointing data. CBRE recently reported that commercial office vacancy rates were 16.2 per cent (in other words, one in six Brisbane offices is empty). The significant number of regional locations that have produced rates of job growth above the two-year national average of 6.6 per cent is reflecting strong regional tourism, a very exciting outlook for Australian agriculture, advanced manufacturing (especially food-related), some good infrastructure projects, and a rebound in (parts of) the mining sector. The strong growth in retail, accommodation and food, and arts and recreation jobs reflect the sustained strength of Australian tourism. From 5 million international visitors in 2008, Australia is on target for 10 million by 2020. But, it’s more than the traditional holiday hot-spots of Sydney, Melbourne, Brisbane and the Gold Coast that people are now visiting. With more affordable airfares and a significant increase in destinations that now offer direct flights within one or two hours, tourists are exploring alternative attractions throughout Tasmania and mainland regional Australia. The continuous extra demand from international and domestic tourists is creating new jobs in great cities like Cairns (tropical wonderland), Dubbo (Western Plains Zoo), Orange and Armidale (foodie experiences), Bendigo and Ballarat (our gold rush heritage), and regional Tasmania (because, well, it is God’s country!). If Queensland can ever get its act together with a serious tourism campaign, the state with more tourist attractions than any other has the potential to set economic records. And, when the cash registers start ringing again, Queensland’s affordable housing and desirable lifestyle will drag interstate migration well above 20,000 per year. That’s one of the most sustainable growth drivers that any property market could wish for. April’s Commonwealth Games is just a short sugar fix; the state still lacks a long-term tourism strategic plan. While growth in jobs for regional Australia is well overdue, the 2017 data just supports the trends that Propertyology flagged a few years ago and has influenced our decision on a few locations across that our buyer’s agents are helping people invest in. Aside from Australian tourism, the millions of extra people entering the middle class each month during the Asian Century have an enormous attraction to our produce. This nation that was first built off the sheep’s back is now Asia’s food bowl. Universities have recently experienced an unprecedented increase in agriculture-related degrees. And new manufacturing jobs are being created by food processing businesses such as abattoirs, cheese factories, and wine making. Renewable energy is a fast-emerging sector that benefits regional economies more than capital cities. Household budget pressures and environmental pressures are the trigger for billions of dollars already being invested in job-creating wind, solar and battery projects across this vast country. 2017 was one of the strongest years for job growth in Australian history, with a 5.7 per cent increase in volumes for the year. And it wasn’t a year in isolation – total jobs in Australia for the last two calendar years have increased by 6.6 per cent. Closer analysis of ABS data shows that the industry sectors which produced the largest rates of employment growth in 2017 were health (104,317), construction (100,664), retail (60,064), education (40,991), accommodation and food (36,485), and agriculture (28,901). A 2017 net job loss occurred in manufacturing (85,060), admin and support (28,698), public admin and safety (27,433), and mining (4,688). One would assume that a significant portion of manufacturing job losses in 2017 related to Toyota and Holden plant closures (Adelaide and Melbourne) late last year. The health sector is Australia’s biggest direct employer (13.3 per cent of all jobs). The recent growth in the health sector is indicative of our aging population combined with the rollout of new positions under the NDIS program. Propertyology believes that Australia’s construction industry (the backbone of our economy) is now at an interesting cross road. Completion of the mining construction boom in 2012-13 resulted in large volumes of workers in this sector being redeployed to new residential […]

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Planning for property investing success in 2018

Bradley Beer — Thu, 15 Feb 2018 00:03:45 +0000

Remaining informed is the key to success. A New Year is here and with it comes new opportunities. As we look towards the year ahead, it’s safe to say that the landscape for property investing in 2018 will be a little different to what we have experienced in the past. One of the key changes is an investor’s ability to secure a loan. In recent years, the Australian Prudential Regulation Authority (APRA) have implemented measures to slow investor lending. In some cases, this has resulted in investors requiring larger deposits to meet loan requirements, interest only loans are more difficult to obtain and investors are currently being hit with higher interest rates. The latest Housing Finance Statistics from the Australian Bureau of Statistics released in December 2017 indicates that investment housing commitments continue to fall. A 0.5 per cent drop occurred in October 2017 when compared with September 2017. This downward trend appears to be influenced by a slowdown in investment in metropolitan areas rather than regional areas. Combined regional areas had a slight median value increase to just over $355,000 in the December Home Value Index. This entry level price point and the continued growth in dwelling values could make regional areas worth considering for those looking to invest in 2018. Given the changes occurring in the property market, it is essential for investors to be as prepared as they can before making their next purchase. One key factor that can’t be undervalued is research. There is a substantial amount of resources available on property investing that investors should make themselves familiar with. At BMT we provides a range of valuable tools to assist property investors in crunching their numbers when making investment decisions. One of these tools is our new online platform, MyBMT. MyBMT users can research and monitor key property metrics in any area, they can also access PropCalc powered by homesales.com.au. This calculator allows users to calculate the after-tax cash flow required to hold any property. PropCalc also has the ability to compare the cash flow of multiple properties, save properties and monitor the real after-tax cash flow of your property portfolio. MyBMT will keep users aware of any new infrastructure or planned developments giving investors a good indication of the growth potential of the area and the expected future return on investment. Data sourced from MyBMT suggests the average purchase price of a property in Australia is $584,000 with Loan to Value Ratios averaging 78 per cent. An investor looking to purchase a property in this price range will require a deposit of around $128,000. If successful in obtaining a loan, the median interest rates available from a bank or lender that an investor would be looking at is 4.37 per cent. MyBMT data also suggests that the average rental return for a property in this price range is $450 per week, or an annual income of $23,400 showing an average yield of 4 per cent. My BMT also allows investors to view, update and download depreciation schedules, and share their live updated schedules with members of their investment team such as an Accountant or Property Manager all in one handy location. Discovering what deductions are available has become increasingly important following changes to depreciation legislation by the federal government towards the end of 2017. The changes restrict owners of second-hand residential properties from claiming depreciation on previously used plant and equipment assets. Despite these changes, there are still thousands of dollars in deductions available for investors to claim and obtaining a depreciation estimate from BMT can help investors to bridge the gap in determining a property’s cash flow potential. The team at BMT Tax Depreciation are here to help with any questions you may have. To arrange a free estimate of the likely deductions on any investment property contact one of our depreciation experts on 1300 728 726 or view our full range of complimentary tools at bmtqs.com.au. We value your continued support and wish you all the best for a successful year ahead.

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2018 property market outlook

Simon Pressley — Mon, 15 Jan 2018 05:19:37 +0000

This time last year, Sydney and Melbourne were in the middle of a property market boom and every property market analyst in Australia was predicted that those same cities would again finish top-of-the- table in 2017. Everyone except Propertyology, that is – we were the one black sheep who made the bold prediction that Hobart would be Australia’s best-performed capital city for 2017 [refer here]. Similarly, we also said that several regional locations would perform well. Now that the jury is out, let’s review what did happen in 2017 and see what our crystal ball says for the year ahead. Who were the winners and losers in Australian property markets during 2017? Melbourne (12 per cent) and Sydney (10 per cent) produced their fifth consecutive year of strong growth. Canberra (7 per cent) was the surprise packet, while Adelaide was also steady. On the other hand, Perth and Darwin had their third year of declining prices. Brisbane (3 per cent) was again underwhelming. Australia’s third biggest city has only seen 35 per cent compound growth over the nine years since the onset of the GFC while Sydney, Melbourne and Hobart produced that in just two to three years. Australia’s most affordable capital city, Hobart, has been the clear stand out in 2017 with 14.3 per cent growth for the twelve months ending September 2017. Given that Hobart also has the best rental yields in the country, the total return (capital growth + yield) is 5 per cent more than Melbourne and 7 per cent more than Sydney. With three months of data yet to unfold to round out the 2017 calendar year, we believe Hobart will end 2017 with at least 16 per cent price growth. That will make it the largest annual increase by any capital city in ten years. What is driving the Hobart property market? As predicted by Propertyology when we began investing in Hobart in mid-2014, the Tasmanian economy has been the most improved in Australia by a long streak and, as usually happens, its property market followed suit. The Apple Isle has some of the best agricultural products and tourism experiences in the world; Hobart is also a beautiful university city. But it’s only recently that people outside of Tasmania have grown to appreciate this. Chinese President, Xi Jinping, made a special visit to Hobart (and only Hobart) in 2014 to foster business relationships and now the secret of Tasmania is well and truly out. The rate of employment growth in Hobart over the last year was four times the national average and double the next best capital city. The economy doesn’t appear to be slowing down either; job advertisements have a very steep trajectory. Records keep being broken in retail trade (the cash registers are ringing loud) and visitor volumes (domestic and international). The strong economy and high consumer confidence means that locals are keen to transact in property and there certainly aren’t any affordability barriers. How did regional Australia perform in 2017? Newcastle (12.7 per cent) and Wollongong (15.5 per cent) again benefitted from the Sydney knock-on effect. Lifestyle markets like Byron Bay (14.1 per cent) and Port Macquarie (9.3 per cent) also performed very well. Lesser-known New South Wales locations such as Maitland (6.2 per cent), Bathurst (6.5 per cent), Dubbo (5.3 per cent), and Orange (4.7 per cent) performed better than four out eight capital cities. The tomato capital of Australia, Guyra, had a stellar year with 16 per cent growth. In Victoria, Geelong (7.9 per cent) had another good year and Ballarat (4.2 per cent) was solid. Vindicating Propertyology’s belief from a couple of years ago that parts of regional Australia with specific agricultural products and locally-based food manufacturing businesses would do well, Colac was a stand out with 19.6 per cent price growth. The underrated rural township of Goondiwindi was Queensland’s star performer last year with 20 per cent price growth. Gold Coast (7.8 per cent), Sunshine Coast (5.7 per cent), and Beaudesert (5.5 per cent) again performed better than the state’s capital. While major regional service centres such as Townsville, Rockhampton, Gladstone and Mackay saw price declines, they all produced an increase in sale volumes and there are a number of positive things soon to impact their respective economies which will flow through to property prices. A 6 per cent increase in transaction volumes in the industrial township of Port Augusta forced the median house price up by 13.2 per cent over the last twelve months. In Western Australia, the lifestyle markets of Broome and Busselton were price growth neutral over the last year while the performance of Albany and Geraldton was in line with Greater-Perth’s, producing a mild decline and showing signs of stabilising. Port Hedland (-33 per cent) and Karratha (-22.6 per cent) had big falls. Launceston (-1.2 per cent), Burnie (2 per cent), and Devonport (2.9 per cent) were yet to show any property price growth resulting from Tasmania’s improved economy although sales volumes have increased and days-on-market are reducing. How will Sydney and Melbourne perform in 2018? 2017 was the fifth year of Sydney and Melbourne’s growth cycle and, even without APRA’s recent credit-tightening intervention, logic would suggest that the property markets of Australia’s two most expensive cities are due to moderate. While there are no immediate signs of Sydney’s economy slowing down, auction clearance rates and sale volumes suggest that Sydney’s property market had flattened right out by the end of 2017. Property prices appear to be well out of reach of most of the buying public and local sentiment has been dampened by suggestions from some economists that prices could fall by as much as 10 per cent. There are real risks with Sydney’s market however, all things being equal, Propertyology’s view is that Sydney property prices are likely to be largely flat for some years. Our analysis of building approval data is such that we see potential for unit prices to ease in some parts of Sydney. Melbourne ended 2017 […]

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