It may not be the same as the property boom of 2013, with the latest survey we are expecting solid growth in house prices for 2017. But, for apartments, cities such as Perth and Darwin are predicted for more price falls.
Sydney and Melbourne expect the biggest growth having four strong years of a 67% and 47% increase respectively and it looks to continue throughout 2017. So in general the property market will remain pretty strong.
Capital city growth forecasts.
But if you have properties in Perth or Darwin or even Adelaide, the prognosis is not positive. In mining regions, CoreLogic’s head of research Tim Lawless said there’s no sign of them climbing out of a hole.
With the Holden production line due to close in 2017, Adelaide’s economy remains weak as few Australians are choosing to move there which shows more of a downside trend than an upside.
But in between the two extreme ends of the property spectrum lie some surprising little gems of opportunities – Canberra and Hobart. For some reason the seems to be an influx of people moving there, they are not just retirees there are also professionals attracted to these areas.
“It’s the people who are winding down.”
The strong Sydney and Melbourne markets have allowed these wealthy Australians to cash out of their properties and buy in seachange cities such as Hobart, much like what happened in the last boom of 2000, he said.
Likewise Canberra is expected to roar into action after a return in government employment and a steadier economy following the end of the federal election in July.
AMP Capital Chief Economist Dr Shane Oliver remains bearish on apartments.
In the next two years, Dr Oliver has reaffirmed his prediction Sydney, Melbourne and Brisbane apartment prices will fall as much as 15 to 20 per cent because of the “massive multi-dwelling building boom”.
While Melbourne and Brisbane apartment prices will fall evenly throughout the city, Mr Oliver says Sydney will have pockets of price falls in Parramatta, inner west Sydney and Bankstown.
“But there are still plenty of opportunities to be found for investors … the long-term fundamentals of well-selected property remain strong.”
On the other hand, rising prices spell more bad news for housing affordability.
In Sydney, first-home buyers and local investors would continue to fossick in growth suburbs, while wealthy baby boomers, mainly in the form of downsizers and empty nesters, would flood the boutique and inner city suburbs in 2017, Colliers International NSW Residential director David Chittenden said.
Melbourne could well surpass Sydney as the growth city, some non-traditional punters have said.
Corelogic index already shows Melbourne catching up to Sydney with the year-on-year price increase at 13.39 per cent.
Brisbane’s housing market remains the most controversial.
JLL’s latest research says a large supply of apartments in Brisbane market over the next two to three years coupled with below average population growth will have short-term impacts.
Hobart and Canberra
The are good prospects for Canberra and Hobart, both Corelogic’s Mr Lawless and BIS Shrapnel’s Mr Zigomanis agreed.
“The smaller capital cities, where the pace of capital gains has been trending higher are likely to see a continuation in these trends as investors start to look more favourably at markets with a higher yield profile that are also earlier in the growth cycle,” Mr Lawless said.
Hobart may be attracting wealthy east coast property buyers, but Canberra is attracting returning government workers.
Analysts believe Adelaide house prices will go “sideways”.
With one of the highest unemployment rates in Australia, Adelaide continues to remain on the “downward trend”.
Perth and Darwin
Analysts and most investors hold the view that prices in Perth still have some way to go – down.
The problem in Perth has been exacerbated by too much supply against a falling population. The RBA said Perth property developers failed to respond to the dwindling population, triggered by the mining downturn, a fact illustrated this month when one went belly up.
Darwin’s issue lies in its soft economy and rising unemployment. But Mr Christopher is of the view Darwin’s decline could be close to the bottom.
“Well, certainly we are closer to the bottom than two years ago. Presuming a new Labor government manages the economy reasonably well, there is every chance that the housing market could bottom in later 2017.”
Article source and citation goes out to Su Lin Tan