Herron Todd White is one of Australia’s prominent property valuation firms. As such they have a unique, on the ground perspective of the various markets around the country. Their ‘Month in Review’ for April contained a write up on the Key Investment Drivers of major markets around the country. At Sound Property we appreciate there are thousands of markets around the country, doing different things at different times.
Here are the key takeaways from the HTW valuer’s comments in each of the main capital city markets around the country.
Sydney Property Market
“In a market as large and diverse as Sydney’s, there are quite a number of influencing factors which play a part in driving the residential property market. Some factors are more relevant to specific sub-markets, be the location or price point, while others are more likely to influence the market as a whole. While political and economic factors are the significant contributors, media coverage also plays a part in influencing buyer and seller sentiment which can fuel property market movements, particularly in a rising or falling market. We do note that any significant increases in the cash rate may have flow-on effects to the home loan market leading to the potential for more distressed sales as homeowners and investors alike may struggle to meet larger repayments on highly geared mortgages. This could lead to pockets of Sydney experiencing a sharp decrease in values in the short term. Looking at interstate migration, it has been well publicised that affordability of the Sydney housing market is at a historic low. It is starting to become evident that although the Sydney job market remains extremely strong, affordability has started to lead to an increase in net migration out of Sydney.”
Canberra Property Market
“Although the ACT has not seen growth quite as strong as Sydney or Melbourne over the past few years, it has still been profitable for many homeowners. The start of 2018 has seen a very slight decrease in capital value growth which may be a sign of the market correcting itself although there are still signs of a strong robust market. There has also been a lot of market activity over the first few months of 2018 in all regions of the ACT.”
Melbourne Property Market
“Strong migration, combined with low-interest rates, have been drivers in all markets, especially the apartment market as investors look to achieve strong yields from apartments and take advantage of reduced interest rates. Until interest rates tighten, the property market will continue to have a strong buy-in from the investment sector. While the cost of living continues to increase and a prediction for interest rate rises continues to loom, there are concerns of affordability given wage growth has remained sluggish. While many outer areas remain more affordable, there are concerns that if wage growth doesn’t come close to matching the increase in the cost of living there will be a softening of these residential markets. Those with more modest household incomes will feel the greatest impact of trying to cover the escalating cost of living.”
Brisbane Property Market
“So, what are the numbers telling us about Brisbane and the surrounding councils? We are at a tipping point… and it’s in a good way. Our population is growing and if job numbers and infrastructure spending continue to rise, then it bodes well for our region’s property. The oversupply of units is a concern, but there are signs that absorption of the stock and repricing in the sector is underway. Keep an eye on us Australia. While 2018 might not be our boom year, the right metrics will reward long- term buyers of South East QLD property.”
Adelaide Property Market
“Many have mixed feelings about the 2018 outlook for the South Australian property market. The increase in the median price appears to be underpinned by the inner ring whilst the outer suburbs maintain slow growth and, in some instances, negative growth. We will be paying close attention to the labour market, foreign investment and interest rates as these appear to be the issues which will have the biggest bearing on the South Australian property market in 2018.”
Sunshine Coast Property Market
“The Sunshine Coast is still rolling along well on most fronts. Land prices, as well as established housing, are continuing to increase with demand remaining strong. Currently, stock levels across the coast are low and we are seeing multiple offers becoming more common again. Units are also improving although not to the same extent as traditional housing. With a number of local infrastructure projects still to be delivered, we’re expecting another good year for the residential property market on the Sunshine Coast.”
Darwin Property Market
“We consider the overall residential market to remain relatively flat throughout 2018, with no confirmed substantial projects on the horizon to boost employment opportunities in the Territory, and in turn the property market.”
Perth Property Market
“As Western Australia’s economy is predominantly influenced by the performance of the mining industry, we have seen some extreme fluctuations over the past few years. The post-peak period is often compared to the boom time, which is bound to disappoint in every measure. By disregarding significant outliers, keeping in mind the countercyclical nature of the local market in comparison to national trends and instead of looking at the longer term, Perth is not doing too badly. In fact, many measures have improved.”
Source: Herron Todd White
This article is provided for general information only and does not constitute personal advice, as it does not take into consideration your personal circumstances. Please consult a licensed tax or financial advisor before making any decision to invest.