The #Australian 2020 Property Market – where will you be in three years?

 

The 2020 Property Market – where will you be in three years?

QBE AUSTRALIAN HOUSING OUTLOOK 2017 2020 by @GillandDebello #property #propertymanagement https://www.slideshare.net/GillandDebello/qbe-australian-housing-outlook-2017-2020

The only cities that are expected to experience a decline in median housing prices are Darwin (.9 per cent) and Sydney (.2 per cent), while Hobart continues to dominate dwelling value growth in the country with QBE forecasting Hobart prices to increase by 10.8 percent by 2020, second only to Canberra at 16.3 per cent. Meanwhile, continued growth is expected for Melbourne, at 10.2 per cent, Brisbane at 7.1 per cent, Adelaide by 6.9 per cent and Perth by 2.8 per cent.

This is all despite a rather flat economy, which according to QBE “is expected to provide little support to the residential market, with economic growth forecast to be relatively subdued over the next three years.”

The reason for this? There has been little growth to replace the vacuum created since the mining boom declined and even with an unemployment rate at a current low of 5.6 per cent, job growth has predominantly been within part-time jobs and underemployment at a record high.

The 2020 property market report focuses this year on the influence of units on nationwide growth rates, with the expectation that Gen Y will remain in rental accommodation longer. Unit commencements in the 10 years to 2012 were at 52,600 per annum, while this increased to 94,000 in the 5 years to 2017. With this increase in supply comes an expectation that capital city unit markets will fall, with Brisbane the highest at 7.2 per cent followed by Melbourne at 4.8 per cent then Sydney (3.8 per cent), Darwin (3.2 per cent) and Perth (.6 per cent). Hobart is expected to have unit prices rise by 8.6 per cent.

Interestingly, the report forecasts a cash rate of only 1.75 per cent in 2020, an increase of only .25 above the current of 1.5 per cent. The report states that any increases are not expected until 2019/20, when signs of a strengthening in the economy are expected. This is one prediction that may come under some criticism from economists who have noticed that the RBA’s long-term strategy of keeping interest rates to a consistent low have not yet had the desired effect to curb the issue of housing affordability, increase wage growth and ease household financial stress.

There are, however, forces outside the RBA’s control influencing financial stress in households, such as high energy prices fuelled by a lack of investor confidence or the general global trend in the West towards low wage growth.

So, with the QBE’s 2020 property market report in mind, where might you be living in just three years?

Sydney Harbour

Sydney – a slowing inner-city market

Median house prices have increased on average 10.4 per cent per annum in the six years to June 2017 and expected to fall by only 4 per cent by 2020. QBE notes that there are “signs of a rising net interstate migration outflow” or in other words, people are leaving or better prices.

High density completions accelerated in 2012/13, which is an indication that by 2020 more people will be living in high density units/apartments, and with a potential for these to fall in value, you may find your first home is an apartment in the middle/inner rings of Sydney.

Melbourne – significant growth and high competition

Population growth has defined the upturn in Melbourne’s residential market. Even with a surging new dwelling supply, this has not been able to meet the increasing demand, which has also driven rents up.

With prices forecasted to increase by 2020 (by 10.2 per cent), may accelerate towards Sydney in median house prices.

Unit supply has met demand, surpassing housing completions, which indicates an increasing number of homeowners living in high density properties.

Brisbane and the 2020 property market

Brisbane – an affordable entry point

Our City, Brisbane, maybe the location a savvy home buyer looks towards in the next few years. The city has experienced moderate price growth (5 per cent) per annum in the past four years, but this eased to only 2 per cent in 2016/17, with affordability being this sunny center’s main drawcard.

With the economy forecasted to strengthen, Brisbane may be an entry point for those looking to buy in the 2020 property market.

Hobart – significant growth driven by an affordable entry point

The southern isle has the attention of the whole country, and may just be your first investment in 2020. It has the lowest median house price of the state capitals, so is an affordable entry point for both homeowners and investors, while the median house price rose by 10.5 per cent in 2015/16.

Where there used to be a net outflow of the population, this reversed to an inflow over the three years to 2016/17.

Adelaide – long term investment options

A similar entry point as Hobart and Brisbane, shows signs of moderate growth and with the median house price at $477,200 at June 2017, affordability is a key drawcard for the City of Churches.

Adelaide is certainly a long-term investment destination, not one to expect quick capital growth with which to flip investments. According to QBE, economic conditions are weakening and population growth has slowed, however this is forecasted to turn around in 2019/20.

Canberra – the quiet achiever

Growth in this city is linked to growth in the public sector, but QBE forecasts significant growth for the 2020 property market of around 16 percent.

Unemployment in some of the lowest in the country, at 3.7 percent in March 2017. Again, it is forecasted that an oversupply of units will drive their price down, while an undersupply of houses will drive growth.

Watch the latest Housing Market Update for Brisbane. The housing and economic data is derived from the CoreLogic Hedonic Home Value Index for the month of October, released November 2017.

Keeping it in the family

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Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. http://goanimate.com/movie/0M4bvcZzgIbI?utm_source=linkshare&uid=0u6RGtWsmlVc Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085. http://www.ljgrealestate.com.au http://www.yellowpages.com.au/qld/aspley/lj-gilland-real-estate-pty-ltd-14091356-listing.html http://au.linkedin.com/in/lindajanedebello http://twitter.com/GillandDebello http://www.facebook.com/pages/ljgrealestate
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