With the new year well and truly upon us, vendors and buyers are wondering if 2019 is the right time to buy and sell property. Here are my predictions for the market this year and the key trends we expect to emerge.
Eastern Suburbs Property Market
Early signals for the calendar year are very encouraging for a stable market in Sydney’s east. Open house attendee numbers are up by 30% in January and early February in comparison to November and December last year, and a few sales have already occurred that didn’t sell prior to Christmas.
Vendors and buyers alike seem to be more realistic going into the selling and buying process which suggests a period of less fluctuation might be on the cards for 2019.
Any impact on the market from the banking royal commission started in 2018 with lending tightening. The 76 recommendations were expected, and the banking sector is prepared.
The upcoming election has some speculating about the impact on the real estate market but traditionally elections haven’t impacted the eastern suburbs market apart from a sentiment of anticipation.
In 2019 sellers shouldn’t attempt to predict the top of the market to the exact dollar. There are genuine buyers in the market and values are significantly higher than they were 4-5 years ago.
If you are looking to buy in 2019 with finance approved & once you identify a suitable home or investment which ticks at least 7 out of 10 boxes, then you should proceed. In most cases, you are paying approximately 5 to 10% less than 12 months ago.
Key Property Market Trends
Trend 1: Dynamic living spaces
With housing affordability concerns behind the rise of smaller homes, we herald a new era of compact living in Australia. While the days of a home with three bedrooms, a backyard, and a pool aren’t completely behind us, they are increasingly giving way to living spaces characterised by dynamic living and flexibility.
The hottest trends in urban residential design this year include:
- Growth in repurposed/shared living spaces reflecting the changing nature of work and family size
- Smaller kitchens as the popularity of home-delivered meals and café/restaurant culture rise
- Decrease in car ownership and parking spaces
- Increasingly eco-conscious home buyers
Trend 2: Cooling market conditions
In the wake of the booming home values between 2012 – 2017, Australia’s metro market giants are now in a correction phase. Senior economists at ANZ Research have suggested a -10% change in prices for both Sydney and Melbourne.
The greatest drivers of this market shift are the changes to lending. Greater scrutiny of personal expenses and debt to income ratios have seen a fall in buyer demand. This has had a quick and dramatic impact on market momentum.
Cyclical price corrections are essential to long-term stability of our property markets, and the broader national economy. The fundamentals of Sydney and Melbourne real estate continue to underpin property prices. Factors such as tight supply, new infrastructure, iconic assets such as beaches, and the popularity of schools, ultimately determine what happens to local property values.
Trend 3: Metro to regional
Australia’s population is soaring and it’s no surprise that more and more city slickers are choosing to escape the hustle and bustle of the country’s capitals in favour of Australia’s regional cities.
While historically known for cheaper housing, regional areas now also boast immense population growth, blossoming café scenes, major shopping centres, good local transport and ample job opportunities.
Here are some of the best performing regional markets and their dwelling value percentage increase from April 2017 to April 2018:
- Geelong (9.8%)
- Shoalhaven/Southern Highlands (9.2%)
- Newcastle (7.1%)
- Sunshine Coast (5.1%)
- Gold Coast (1.9%)
Huge changes come in the form of a new sub-market – Western Sydney, where almost half of Sydney’s population currently reside, and a million more will settle by the early 2030s. The newly signed Western Sydney City Deal will see a ‘once-in-a-generation transformation’, with billions invested into transport, education, health, sport, and cultural projects.
Foreign buyers are taking an interest in Victorian residential real estate, with the state attracting more international investment than any other state.
Brisbane and surrounds
Boosted tourism, surging gas exports and the strongest annual growth in jobs in more than a decade herald immense growth. Economic forecasters predict cities such as Brisbane will lead all Australian capitals, with 13% property price growth by 2021.
Home to the country’s highest wages, ongoing job security and above average population growth, Australia’s capital city is expecting its fifth year of price rises in FY19.
For more information on Australian Property Trends for 2019 download The McGrath Report 2019.