The first quarter of the year has just finished and so far, you can see that a few property predictions and trends made in 2017 came true. Homeowner, property investor or first home buyer: if you still wonder what 2018 holds for you and property, this article is for you.
Read more about the two biggest property markets (Sydney and Melbourne), the rising regional areas and the “rentvesting” trend.
5 property market trends to expect in 2018
- Your mortgage is more expensive thanks to the US rate rises
Australians tend to borrow more than they save. To make up for the shortfall, national banks need to go offshore to get money. Most of this money comes from the US, but the interest rates have been on the rise these last months. We can expect up to four rises this year, according to several financial forecasters.
- Some coastal & regional areas will grow
For the last 12 months, we can note more and more buyer demand in regional areas close to Melbourne or Sydney (like Central Coast, Wollongong, Geelong, Ballarat …) These areas now offer business growth, affordable houses and appealing lifestyle.
- Sydney demand is cooling, when Hobart prices are rising
Sydney’s excessive housing price growth should end as the demand is cooling and prices finally slowing down. It does not mean that house prices will drop, they will just remain flat in 2018. In Hobart, demand from buyers will continue to grow, and the prices will rise too. The suburb of South Hobart is one of the most in-demand locations in Australia, driven by a jobs growth (not a property speculation).
- Investing in rental housing is gonna be more challenging
Conditions are getting tougher for investors, after some record years of investment in residential property. Tax incentives (negative gearing), Interest-only loans that are more expensive due to new restrictions on lending (who can borrow, where they can buy)… As a consequence, fewer investors lead to less rental housing and more rental housing stress in the capital cities.
- The apartment boom is over in VIC and QLD but it’s not a ‘bloodbath’
Due to the oversupply of apartments in Melbourne and Brisbane, building approvals are now trending downwards. Some apartments have lost value, but the state of the market is pretty stable. In 2018, the level of building approvals for apartments will continue to decline.