The outlook for the Australian property market in 2017 is interesting with several national and international factors set to influence conditions.
Two of the biggest political stories of 2016 were the election of Donald Trump as president of the United States, and Brexit. While the impact of Britain’s exit from the EU has largely been limited, the full effects of the move, along with uncertainty from the US economy will no doubt effect the Australian economy.
Banks and the RBA rates
With RBA interest rates set quite low, and expected to remain low, banks feel less pressured. Lending will likely continue to be restricted with rising rates for investors expected. There is also a flow on effect of a slow quarter last September.
2016 saw the highest recorded level of demand. Partly due to a drop in the number of listed properties, combined with a surge of potential buyers. Demand is high nationally, though conditions vary across states. NSW and Tasmania are both in high demand currently, while NT and WA are experiencing lower demand.
Over development within the apartment sector
Unprecedented levels of development in key suburbs will see prices slightly fall due to oversaturation in these markets. Melbourne and Brisbane in particular are at risk of being affected due to the number of apartments currently being developed. This is good for affordability, but not so great for investors.
Affordable options and shifting demand
Median prices are increasing across the majority of capital cities and driving a change in behaviour and affordability. As demand for popular suburbs is increasing, homebuyers are looking to surrounding suburbs close to ideal locations. Outer eastern Melbourne and central coast NSW are two examples of this occurring with many people desiring the larger houses and bugger blocks of land that the outer suburbs provide at affordable prices.
All things considered, 2017 is shaping up to be a relatively consistent year for Australian property, inline with predictions. Though a couple of potential curve balls could provide yet unknown challenges. The majority of markets, in particular capital cities and surrounding suburbs, are continuing to rise at a steady and expected rate. This ensures real estate remains a valuable investment and the Australian dream.