Yahoo Finance Aussie property markets are finally on the move
I can feel it - our property markets are on the move.
In fact almost everyone involved in property has noticed a marked change in consumer confidence, buyer enquiry and general interest in our housing markets.
Most property economists believe the worst of the housing downturn is over, with a stabilisation of the Sydney and Melbourne real estate markets and property price falls now levelling off elsewhere.
Melbourne and Sydney enjoy the strongest economic conditions around Australia and despite being the two most unaffordable markets, are the only locations which so far to have shown green shoots.
Firstly there was a strong rise in auction clearance rates in our two big capitals and CoreLogic reporting housing prices are up up by 0.1 per cent in Sydney and 0.2 per cent in Melbourne in June.
Factors that led to this change in the market momentum include:
Increased confidence now that the Coalition has won the Federal Election
APRA easing bank’s assessment criteria for new loans – this should commence in the next month
Tax cuts are on the way - more money in our pockets
The best housing affordability nationally since 2016.
Positive messages in the media stoking consumer confidence.
First home buyers returning to the market encouraged by government incentives.
And this will only get better in the next few months as APRA's changes haven't really worked their way through the system yet, many home owners and investors aren’t yet enjoying the lower mortgage rates and the tax cuts are yet to hit our hip pockets.
What’s ahead for the Australian property market?
We’re at an interesting stage of our property cycle with signs we’re nearing the bottom.
While there may be a little more downside in our big two capital city markets it looks like the best time to buy counter cyclically in Sydney and Melbourne for over a decade and to ride the Brisbane property cycle.
Canberra property should continue to perform well and Adelaide should hold its own, but it’s likely Hobart will now slowly move to the slump phase of its own property cycle and there is still more downside for Perth and Darwin
Of course, property will remain a sound asset for long term wealth creation, but now more than ever correct asset selection will be critical, so only buy in areas where there are multiple long-term growth drivers such as employment growth, population growth or major infrastructure changes.
Similarly, suburbs undergoing gentrification are likely to outperform.
Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
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