2016 may not be the best year for those looking to sell property Australia, as the housing market in Australia is headed for a slowdown after years of rapid growth. But if you are looking to buy property Australia, 2016 may just be the year for you. The cooling down of the housing market in Australia will be appreciated by buyers in general.
Shane Garrett, senior economist at HIA explains why the housing market is set for a slowdown: “Activity is at such a high level… it can’t be kept at such a high level. There’s also the fact that population growth is slowing and less people are coming here from overseas to work as the international (economic) conditions are improving.”
Melbourne and Sydney were anyway overheated and there was a danger of a real estate bubble forming in these cities, so a slowdown in the market will actually come as a relief. The situation is worse for sellers in Perth, Canberra and Darwin, as they never experienced the sort of growth that Melbourne and Sydney did, and now are faced with lower home prices. But generally, one expects a bit of sanity to be injected into the housing market in Australia in 2016.
So, have property prices already peaked in Australia?
Yes, property prices have certainly peaked in Australia and are expected to be stable in 2016. The market is slowing and this is a good thing, as it allows people to make better decisions regarding their real estate. Both buyers and sellers can plan better and anticipate the price trends over the near future. So a bit of stability was just what Australia needed and we have it now in 2016.
Cameron Kusher, a senior research analyst at Core Logic RP Data says, “Over the past year Sydney and Melbourne have continued to see the strongest rates of home value growth, however, over recent months we have seen values in each of these cities fall. Whether values in Sydney and Melbourne continue to fall or the rate of value growth just slows, will be one of the primary factors determining housing market conditions in 2016.”
“The Adelaide and Hobart markets will likely see fairly moderate levels of value growth while we anticipate further value falls for Perth and Darwin,” Mr. Cameron adds.
What can buyers expect in 2016?
A slowdown in prices is great news for buyers, especially those who are looking to buy their first houses. Many first-time buyers were pushed out of the housing market in 2015 because of the high prices. They will now re-enter the market and hope for better prices. There is certainly a lot more confidence among home buyers, who feel good about the economy and are positive about the direction that the country has taken over the past 10 years or so. They face less competition from speculators, so that is a good thing for sure.
What can sellers expect in 2016?
We don’t think sellers will have a terrible year in 2016 – they just won’t be able to make the sort of profits they did in 2014 and 2015. But generally the economy is back on track and the situation in the property market is very stable across Australia. So we don’t see sellers complaining too much. This is a great opportunity for them to upgrade to bigger homes, especially if they have growing families.
What about overseas investors?
Overseas buyers have always been interested in Australia and we expect the interest to continue, especially in Sydney and Melbourne. The Chinese in particular have great interest in Australia and the recent fall in the Chinese economy means that a number of wealthy Chinese will be on the lookout for safe havens abroad for their sizeable investments – Australia fits the bill perfectly for them.