Australia’s Property Prices Will Continue Falling for Foreseeable Future
The value of homes in and around most of Australia’s capital cities are set to continue on a downward trajectory, according to a survey carried out by economists, with Sydney’s property market experiencing the most dramatic fall.
The survey, which was taken by 15 leading property and finance experts, shows that almost all of the nation’s major cities bar Adelaide and Hobart are expected to see a drop in the value of residential properties. Indeed, 93% of respondents stated that they expected a price dip in Sydney, with 57% expecting a decline of at least 5% over the next year. What’s more, the mere 7% who expected prices to rise predicted only a minor increase of around 1-2%.
What About Other Cities?
Perhaps unsurprisingly, many other cities were predicted to take a similar path to Sydney, with 93% also expecting a price drop in Melbourne, 100% predicting a drop in Darwin, 75% believing Perth will take a hit and 61% predicting Brisbane to follow the trend.
What Does This Mean For Home-Owners, Buyers, And Industry Professionals?
For first home buyers and those hoping to make a move, the market environment presents an opportune moment to get moving. If prices continue to tumble, buyers could realistically take advantage of a great bargain before the market starts to recover. Indeed, with smaller deposits needed to get on to the property ladder, young people and renters who have had a tough time over the past few years could see a turn-around in their luck.
For private lenders offering home loans to these buyers, the market presents a mix of new challenges and opportunities. Firstly, it is important to note that with property prices becoming more affordable, the number of buyers who no longer need a loan is, of course, going up. It is also becoming tougher to secure non-bank loans as criteria become more stringent. What’s more, it has been reported that, ultimately, the residential property market is moving from a seller’s market to a buyer’s market, with a decline in first home buyers entering the market last year. However, with the recent property dips, this seems to be changing, permitting more first home buyers to make their way on to the ladder and, in many cases, to seek out non-bank loans.
So What About Adelaide And Hobart? In contrast to the predictions for most major Australian cities, 55% of finder.com.au respondents predicted a rise in the value of Adelaide’s residential properties. Furthermore, of those who expected a drop, 18% expected a fall of between 1 and 2%, and another 18% predicted a decline of 3 to 4%, demonstrating much more conservative estimations in relation to price drops than in other areas.
Hobart, meanwhile, is expected to experience the most impressive price growth, with 91% of those who took the survey expecting house prices to go up. What’s more, 18% of those who expect such an increase predict that it will amount to over 6%. Of the 9% minority who expect a fall in prices, the prediction was for a 5 to 6% drop. The reasons for these predictions could be something to do with investors hoping to make the most of untapped opportunities within these quieter cities. With much financial activity going on in Sydney or Melbourne, for example, it can be easy to forget the great productivity that is going on in places like Adelaide or Hobart, which people may hope to move to for a quieter life outside of the hustle and bustle.