The days are getting longer and sunnier and if you are looking to buy or sell, the start of the warmer weather signals the start of peak selling season.
So, what can we expect from the property market this spring? Here’s a look at what I think will and won’t happen.
Interest rates have been at record lows for some time and Philip Lowe, the RBA Governor, has said that while the next move is likely to be up, it won’t happen for some time.
But despite there being no movement in official rates, home loan rates are now on the way up as banks grapple with increasing wholesale funding costs, a crackdown from the Australian Prudential Regulation Authority on credit growth and a new banking tax.
In short, your home loan is going to become more expensive.
Lower listing numbers in winter did make it tough for buyers. With so much demand in the market, as well as price growth, you would expect more people to sell.
The problem is that when the market is too hot, upgraders tend to hold onto the property they have, leading to fewer properties on the market. But price growth seems to be moderating and this will be good news for listings.
Can’t afford to buy in Sydney? Or are being continually out-priced on houses in inner Melbourne?
Rising prices change buyer behaviour. Sydney’s eye-watering prices have led to increases in demand for homes in more affordable locations like Wollongong and the Central Coast.
In Melbourne, the north-east continues to be popular as buyers look for bigger homes on bigger blocks, but still conveniently located near public transport.
Tasmania continues to see the highest demand levels in Australia, likely driven by the state’s comparatively lower prices.
Price growth is likely to moderate, but a market crash certainly isn’t on the horizon.
While household debt levels are too high in many cases, there would have to be a significant economic trigger for a lot of people to sell.
This could either be a rapid rise in interest rates or a rising unemployment rate.
Yet we all know unemployment is on the way down. And while interest rates are starting to creep up, the rise is not rapid enough to act as a trigger.
Worried about buying off the plan? Don’t be. But do pick your location and developer carefully.
Concerns about over supply are becoming less of an issue, even in high supply markets like Melbourne and Brisbane.
While some apartments may see declining prices, quality buildings created by reputable developers will continue to do well.
Two interest rate cuts last year led to very strong price growth over spring.
Although demand for property is still very strong, higher lending rates are likely to continue to moderate the market, which will be welcome news for buyers.
Author: Nerida Conisbee 01 SEP 2017
For the full article and more information, click to https://www.realestate.com.au/news/spring-property-market-predictions/