5 PROPERTY MARKET TRENDS TO EXPECT IN 2018
- Posted By Prince Lakshman
How will the housing market fare in 2018? It’s the hottest question on the lips of Australia’s property players, prospective buyers, and homeowners.
Here are five property market trends that will manifest themselves in the coming months:
- Mortgage rates are expected to rise
Financial markets predict that the RBA will raise the official cash rate of the record low 1.5 per cent level late in 2018. This will have a measurable impact on household mortgage payments.
However, the RBA has expressed that the Australian property market is cooling and will not feel the need to lift the rates to slow the market.
Whether or not the Reserve Bank will boost interest rates this year, borrowers should still prepare themselves for higher mortgage rates because there’s no indication that rates will decrease in the near future.
- Property prices to moderate
Property prices in Sydney slowed to a trickle after years of ridiculous percentage price gains. The same can also be said to Melbourne’s growth, which has noticeably slowed towards the end of 2017. Experts agree that this trend will continue this year.
Having said that, it’s expected that the property market will welcome more first-time home buyers.
- First-home buyers will make a comeback
With Melbourne’s soaring property market beginning to decline a bit in 2018, there will be a resurgence among first-time home buyers.
Although it’s predicted that property investors will pull back, they might want to take this slow growth as a buying opportunity if they have a long term outlook. Slower markets give smart investors the chance to buy more properties at a cheaper price, which will yield double digit capital growth in the long term.
- Homeowners opting to renovate over moving houses
Due to high stamp duty taxes on property transfers, Australian homeowners are choosing to renovate their homes instead of moving.
- Strong population growth will continue
Australia’s strong population growth will underpin property markets. This means there will be more demand for housing.
Over the last year, Victoria was the fastest growing state with a population increase of 2.4% and this soaked up much of the anticipated oversupply of new apartments in Melbourne.