Wondering what the property market has in store for 2018? Whether you’re on the hunt for a first home for your family, or you’re a seasoned buyer on your fifth investment home loan, knowing what’s ahead is key to making sure you find the right property fit.
Below I’ve outlined where I think the property market is headed in 2018, from a slowdown in the red hot Sydney market, to a gradual increase in areas like Adelaide and Perth, through to bumper growth in Hobart.
Sydney – growth to drop by 5%
In 2017, we saw the Sydney market begin to slow and plateau. I’d expect it to continue dropping over 2018, but not in a major downslide.
There’s a higher than average number of properties available in Sydney, and clearance rates are down, pointing to a slower market. In fact, I wouldn’t be surprised if clearance rates are actually quite a bit lower than reported, and they’re likely to stay low thanks to under-reporting of sale prices by agents.
I’m predicting a tough spring market for Sydney in 2018, although Autumn is expected to pick up and first home buyer demand will likely be strong.
Hobart – growth of 10%
Hobart had a booming 12% growth last year, and I’ve got my money on it to continue upward in 2018. Part of this is the fact that housing in Hobart is some of the country’s most affordable among our capital cities, but improvements in the local economy and increased migration as Aussies seek a lifestyle change will likely contribute to rising prices over the coming year.
Low vacancy rates and high rental demand mean Hobart could very well be an excellent investment prospect in the near future.
Melbourne – 5-7% growth
Melbourne has been a strong first home buyers market throughout 2017, and will likely stay that way in the new year. There’s still more affordable housing available here than in Sydney, and with strong population growth expected, the market will likely grow too. Having said that, I think it will scale back from the bumper 10% growth of 2017.
Clearance rates in Melbourne are also expected to drop from 70% to 60%, as first home buyer activity slows a little and the pent-up demand flattens out.
Some inner-city apartment markets may struggle a bit thanks to oversupply.
Canberra – growth of 7%
Canberra is still a hotspot for investors and first-home buyers alike which will see a reasonable amount of growth in 2018. There are low vacancy rates and a strong local economy in the city, plus as Aussies continue to move to the area for the excellent job market and lifestyle opportunities, this will see demand continue.
Brisbane – growth of 5%
Housing affordability and a stable local market have seen steady population growth in Brisbane lately, which in turn is leading to growth in the property market. In 2017, the city saw growth between 4% and 5%, a slow and steady rise which we can expect to see continue for a number of years.
Having said that, apartments could struggle in comparison to a strong housing market, thanks to oversupply in some areas.
Adelaide – 3-4% growth
Adelaide’s property market has been stable for some time, and will likely continue on a path of slow and steady growth for 2018. In the last year, Adelaide saw a price increase of 3-4% and I’d expect much the same from the coming twelve months.
This consistent growth, while not as immediately impressive as the forecast for other cities, makes Adelaide an ideal market for investors, since prices aren’t prone to sudden drops or spikes.
Perth – growth of 2-4%
Although the Perth housing market has struggled over the past few years and experienced a slight price drop in 2017, in the last quarter of the year it stabilised again. Looking forward, I’m expecting a period of modest growth.
Part of the reason why could come down to the fact that the city is experiencing steady population growth and that it offers properties at a much more budget friendly price point than many other capital cities. Perth is also starting to overcome the challenges posed by the mining collapse and the local economy is now more secure.
If you’re planning to get in to the property market in 2018, make sure you come armed with a competitive mortgage. Head over to our home loan comparison table to take a look at some of the options.