The new year is already in full swing and if you’re looking to get active in the property market this year, it’s important to know what to expect. Whether you’re a first time buyer or a seasoned property investor, knowing what’s ahead is key to making sure you find the right property fit.
Property prices will remain fairly steady
Towards the end of 2017, the Sydney house market began to slow and plateau. This was partly explained by APRA’s tightening on investor borrowing and interest-only loans which resulted in higher interest rates for those borrowers, lowering the overall demand for housing. After speaking with many agents, the understanding is that the heat has come out of the market for now. Stock levels of property are at the lower end (especially in the most desirable suburbs) so this is helping the market remain steady. And whilst this continues, buyers are outnumbering sellers, heightening the activity of eager buyers. It is expected that buyer numbers will remain buoyant and achieve strong purchase results while the market is in its current moderate state.
In other Eastern states, we expect to see Victoria experiencing fairly steady market fluctuations. There is still more affordable housing in Melbourne and surrounds than in Sydney and the strong first home owners buyers market throughout 2017 is likely to continue this year. On the other hand, Queensland has the capacity to rise slightly in the next year. Housing affordability and a stable market have resulted in a steady growth in population which in turn is growing the property market. Last year saw a slow but steady rise and it is predicted that this will continue in the upcoming year.
Interest rates are unlikely to change significantly
Despite projections from numerous economists that the RBA will increase rates up in 2018,there should be little to no change in interest rates this coming year. Factors such as low growth in global wages and inflation as well as continued weak consumer spending due to household incomes under pressure, will provide conditions to retain interest rates at 1.5 per cent.
When looking at longer term fixed rates (3-5 years fixed) and using those rates as an indication to predict broader interest rate patterns, it suggests to that rates over the coming year or two will remain fairly steady, with the minimal chance of a slight increase late this year.