January 2016 - Australian Property Predictions for 2016

By Rich Harvey, Managing Director propertybuyer

Christmas period. In our first update for 2016 we examine the multitude of predictions for the property market in 2016. Where are the opportunities and trends?

To get a jump start on other buyers don’t miss out on our upcoming February seminar on Property Directions & Strategies for 2016.

In this edition we look at:

1. Australian Property Predictions for 2016
2. Seminar, 17th February  - Property Directions & Strategies for 2016
3. Webinar Replay, 20th January - Terry Ryder & Rich Harvey

1. Australian property predictions for 2016

Welcome to the New Year!

There’s a host of predictions floating around out there suggesting that property prices will rise or fall by a certain amount. At one end of the spectrum we have Knight Frank being very bullish suggesting that Sydney house prices will rise a further 10% this coming year. At the other end of the spectrum credit rating agency Fitch Rating predicts Australia-wide price rises of just 2%.

Louis Christopher of SQM Research is predicting Sydney will continue to rise but more modestly at 4% to 9% this coming year (but more likely at the lower end of range). He has generally been on the money in the past amongst all the experts.

Domain Group senior economist Andrew Wilson is tipping growth for Sydney at around 4% and claims it has long been an “investor magnet” due to its strong economy and under-supply of homes. Wilson tips other capital cities to have modest growth in the year ahead with Melbourne at 5%, Brisbane and Darwin 3%, Adelaide and Hobart 4% and Perth just 2%.

Eliza Owen, Market Analyst at Onthehouse, believes that despite the slowing of growth in Sydney, 2016 is unlikely to see a market crash due to strong population migration in New South Wales and Sydney, feeding dwelling demand. Even a market correction of 10% would still leave Sydney home owners well off after the latest housing boom.

Owen also points out that the regional markets of Lake Macquarie, Newcastle and Wollongong have seen enormous capital growth, which is most likely a result of spill over growth as individuals and businesses seek cheaper rent outside the Sydney Metropolitan.

The problem with any forecast is trying to sum up the direction of a diverse range of property markets into a single figure. Australia has over 15,000 suburbs and there is over 700 suburbs in Sydney, over 540 in Melbourne and around 450 in Brisbane. So to say that Sydney will rise by 4% can give a misleading perception to a novice investor thinking that buying an over-priced off-plan apartment in Zetland will actually see price growth in their property. That poor investor may well see a 5% decline in value in their property due to the rapid increase in supply in that local market.

Smart home buyers and investors need to look at the individual drivers of supply and demand within a smaller zone and at the suburb level. That’s where the real research is done - at the micro level. While the overall predictions can give you some comfort that property is a good asset class, it is far better to think long term and become an expert in the local housing market and make better decisions accordingly.

Enough soap boxing for now – let’s look briefly at what happened in 2015. In summary it was the Sydney and Melbourne show.  While the CoreLogic RP Data Home Value Index showed national home values rose by 8.7% over the 12 months to November 2015, only Sydney (12.8%) and Melbourne (11.8%) recorded double digit growth. Brisbane (4.0%), Adelaide (3.3%), Hobart (1.1%) and Canberra (4.5%) each recorded relatively moderate value rises while values fell by -4.1% and -4.2% respectively in Perth and Darwin.

So what is in store for the year ahead? Expect to see lots of media conjecture about prices falling or a potential crash to spook the market. We are likely to have a Federal election in the latter part of the year.  Interest rates are going nowhere. In fact, if weak economic growth persists, we could see another rate cut.  The federal budget deficit is rising, but the debt is at a manageable level for now. Our Aussie dollar is hovering around US70c but predictions are it is likely to decline to closer to 60c by years end.

For those considering buying a property this year, the good news is there is less competition.The frenetic activity at auction has subdued and there should be a more normalised market heading into 2016.  Price growth is slowing but prices are NOT going backwards at this stage (Jan 2016). Prices in the blue chip areas of the Eastern suburbs, lower north shore, city and inner west  will continue to hold up well as aspirational buyers and continued limited supply persist. The western Sydney market will show lots of opportunity for buyers as it is more affordable and investor numbers have dropped off due to APRA finance restrictions.

There are good deals around for home buyer finance now – the banks are hungry for more mortgage business so don’t be afraid to refinance your loan and save money or look around for a new place to live.  Please call us if we can assist you in your home search.

To hear more in-depth analysis of the property market I would invite you to join me at our first live seminar for the year on Wed 17th Feb with special guest speaker Eliza Owen, Market Analyst from Onthehouse – see more details and booking link below.

If you would like to get your home buying or investment property plans on track, please call us on 1300 655 615 or email your wishlist to discuss your requirements  to start the conversation about your requirements and goals.

Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia's most awarded Buyers' Advocates.  Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. Visit www.propertybuyer.com.au or call 1300 655 615.  

2. Seminar, Wed 17 Feb - Property Directions & Strategies for 2016

You are warmly invited to our first seminar for 2016.

Early in the New Year is the ideal time to get your property goals on track. After stellar growth in Sydney and strong growth in Melbourne where are the next opportunities for property investors and home buyers? We are pleased to announce that Eliza Owen, Market Analyst at Onthehouse.com.au will be sharing her valuable insights into the key property markets around Australia. Onthehouse (parent company of Residex) has a proven track record of predicting the next property trends and providing rigorous and timely research for property buyers.

You will also gain excellent ideas about how to plan your next property purchase and look at innovative ways of growing your property portfolio. Rich Harvey, Buyers' Agent and CEO of propertybuyer.com.au will outline his latest strategies.

We will also spend some time looking at the latest APRA changes in the finance industry and the challenges and opportunities this opens up for both investors and home buyers.We also have mortgage specialist David Allen from Loan Market presenting his tips on what to do when lenders say no and how to finance multiple properties.

This event is likely to book out so reserve your ticket early.

Topics covered at this special event include:

• Property market outlook for 2016
• Where are the next growth opportunities
• Yield vs growth areas?How to search
• The impact of infrastructure spending in Sydney
• Designing a personalised property strategy
• Tips for picking property winners
• What APRA changes mean for borrowers
• Tips and traps for your next loan application
• How to get multiple loans approved and build a portfolio
• Bank vs Non-bank lenders – the pros and cons

Date:  Wednesday 17th February 2016
Time:  (6.30pm registration), 7.00pm start to 9.00 pm
Venue: SMC Conference & Function Centre, 66 Goulburn St Sydney
Cost: $19 single ticket, $29 double ticket

Limited seating is available so book early to reserve your spot today!

Speakers

1. Eliza Owen, Market Analyst at Onthehouse.com.au (Residex)

Eliza Owen is the housing market analyst and economic reporter for Onthehouse.com.au. She holds a first class honours degree in Economics from the University of Sydney, where she was a winner of several academic awards including the Business School’s “Three Minute Thesis”competition.

Eliza is a regular on Backchat on FBI Radio, and has been a guest speaker on Triple J’s Hack, 702 ABC Radio, Sky News and at TEDxYouth Sydney. She provides commentary for various print media outlets including The Guardian Australia, the Australian Financial Review, Pedestrian TV, the Daily Telegraph and more. Eliza has worked at Onthehouse.com.au since 2011 in various roles including as an economic report writer, editor and data analyst.

2. Rich Harvey, Managing Director and founder of propertybuyer

Rich is a buyers’ agent, property investor and professional economist with over 19 years’ experience in the property industry.He is a research expert and highly skilled in investment analysis and negotiation techniques that can deliver real savings for his clients. Rich and his team have purchased over 2000 properties for their clients.As Australia’s leading Buyers Agent, Rich has won 27 major awards including the prestigious National Telstra Business award in 2007 and also named the winner "Best Buyers Agent in Australia" by the Real Estate Institute of Australia (REIA).

3. David Allen, Finance Broker, Loan Market

David Allen is a Mortgage and Finance specialist with over 15 years experience in Financial Services.David prides himself on being the local authority on mortgage and finance broking in Sydney.

His clients benefit from his dedication in obtaining accreditation's with over 30 lenders. He uses the depth of his accreditation's to provide the client with access to market leading home loans David has completed the Diploma of Finance and Mortgage Broking Management and is proud to be a full member of the industry's peak body, the Mortgage and Finance Association of Australia (MFAA).

This event is likely to book out so reserve your ticket early.

If you are interested in buying a home or investment property in the Wollongong / Illawarra area, please call us on 1300 655 615 or click here to email us your wish list today.

3. Webinar Replay

Due to popular demand, we are replaying our Rich Harvey & Terry Ryder webinar - don't miss it!

At this Webinar you will hear respected and independent commentator Terry Ryder share his latest insights into the real estate markets around the country. Gain a true perspective on where the market is heading with the real facts and figures. Terry will uncover the best opportunities available to property investors looking to kick start the New Year.

Rich will also be briefly sharing some of our latest strategies and case studies that we have used to help investors make considerable equity and positive cashflow. We will also look at the seven classic mistakes that property investors make and how to avoid them.

There will also be plenty of opportunity to ask your questions and have them answered during the webinar.