Coming out of the Spring selling season, demand is still surging with low rates and house prices continuing to rise in most areas.
According to NAB’s August Housing Market Report1, 2016 property prices have proved more resilient than expected, supported by higher than predicted population growth and two Reserve Bank cuts to interest rates. The latest monthly figures from Corelogic2, released 31 October, show that the average value of houses and units rose across all capital cities except Adelaide and Hobart. Sydney continues to soar, where the median dwelling price is now a jaw-dropping $800,000; this is $200,000 more than Melbourne and more than double Hobart’s median price of $343,500.
In regional areas, mining regions continue to experience weak housing market conditions, but areas associated with tourism and lifestyle have strengthened in recent years. However, in coming months, NAB economists expect to see mixed conditions in the housing market due to a range of factors, including turnover, time on market and vendor discounts. They predict prices will weaken in 2017, with forecast housing growth fairly subdued at 0.5%, and unit prices dropping by 1.9%.
Demand at fever pitch
Overall demand for houses and units is strong, according to the October REA Group Property Demand Index report – it’s at an all-time high in NSW, Queensland, South Australia, Victoria, Tasmania and the ACT3.
The number of people looking to buy on realestate.com.au increased nationally by 8.2% in October, although overall listings on the site were lower than the same time last year, according to the report. With property demand so strong, supply may well increase as more owners look to take advantage and sell.
But affordability will continue to be a challenge for hopeful buyers, particularly in NSW and Victoria.
The suburbs most in demand
According to the REA Group Property Demand Index, lifestyle factors and good infrastructure, rather than prestige, are now driving demand. Victoria’s leafy outer suburb of Warrandyte took top spot on the demand index for houses in September, replacing the pricier and trendy inner-city suburb of Prahran.
Overall it’s been another strong year for the Australian property market, but experts are expecting to see mixed conditions as we move into a new year.
Author: Alan Faint, http://www.hfcahobart.com.au/