2018 Property Market Summary
2018 has certainly been an interesting year when it comes to property!
The cash rate has now been on hold at 1.5% since August 2016 and there has not been an official cash rate increase since November 2010.
Despite this, many banks have increased their standard variable rates during 2018.
When this happens, all their mortgage rates generally go up by the same amount.
Many of us are also having difficulty securing finance, with more being scared off by media coverage, a one size fits all mentality and talk of an impending crash.
But Australia is made up of many sub-markets, so whilst growth has slowed in some areas, it continues to rise in others.
Sydney and Melbourne experiencing weakest conditions
According to recent statistics from Core Logic, Sydney and Melbourne continue to experience the weakest conditions in 2018.
As at 31 October 2018, the Sydney median property value had fallen to $833,876, that’s a drop of 7.4% year-on-year.
The median value in Melbourne, meanwhile, also dropped 4.7% year-on-year to $665,044.
Whilst the drop is indicative of stricter lending availability, many other areas across the country are still experiencing positive price growth.
Brisbane prices forecast to rise further
Brisbane homeowners certainly have reason to be cheerful this festive season.
The Queensland capital is leading the nation, defying the slowdown being experienced elsewhere in the country.
The Brisbane median value has risen to $491,925 over the past 12 months, with forecasters predicting the trend will continue due to increasing migration, an improving economy and relative affordability compared to other capital cities.
House prices in the Queensland capital could be set to rise to 11.3% by June 2021 to reach $615,000, according to the latest BIS economics Australian Housing Outlook.
In summary, the rental market has remained relatively quiet, with capital city rental growth rising just 0.8% over the last 12 months.
Despite this, yields have increased, as the rental growth has generally outpaced median price growth across the country.
As a nation, we have clearly moved into the next phase of the property cycle.
Growth has slowed in many areas and gone backwards in others.
Smart property investors realise, however, that this is a time when they will face less competition when purchasing investment-grade property.
Now more than ever, it is crucial we consider the many growth drivers that will still influence long-term median price growth, such as inward migration, employment opportunities and future infrastructure projects.
Thinking about investing in property in 2019?
We are now taking requests for strategy consultations, starting w/c 7 January 2019.
The goal is to talk to you about where you are currently at and more importantly what you would like to achieve through property investment in 2019.
Please reserve your space below, we look forward to catching up with you in the New Year.