For a number of years now the Australian property market has been in a boom, with property prices way out of the reach of many Australians.
Housing is by far Australia’s largest asset and makes it the bedrock of the economy and the financial system.
40% analysts are predicting a drop in property prices during 2018 with just 20% predicting an increase of 4 – 8%.
Prices have already started to slip in Sydney and Melbourne but are still seeing moderate growth in Canberra & Brisbane. Buyers agents are becoming an increasing choice among those who are looking to invest in property as the market continues to be unpredictable. 2018 may well see tighter lending restrictions and fewer overall property investors.
Australian property prices are typically dictated by the Sydney market which is on a downward trend. Some experts are even predicting decreases as large as 10 – 15% in NSW with a 5 – 10% fall in Melbourne.
Areas like Darwin are currently down at least 20% from their peak and continuing to decline but with the hopes of flattening out within the next 12 months.
Homeowners around the Sydney area who have owned their property for a number of years and are looking to downsize would be advised to start looking now. Properties in coastal areas are very affordable right now and if you have owned a property in Sydney for 10+ years you can expect it have almost doubled in value since then.
In Perth, experts say that prices are likely to remain flat during 2018 with possible further drops in 2019. Many areas are simply undergoing value correction with the Sydney market around 40% overvalued in the current market.
There are fewer houses on the market than there have been in previous years and there is also a lower rental vacancy record indicating that fewer homeowners are willing to sell at this time.
A large part of Australian debt is home loans and more than a third of those are interest only mortgages. Tighter lending standards is inevitable as we move towards 2020 and although homes may become more affordable, fewer people will fit the regulations and more and more properties could be snapped up by investors.