It’s no secret property prices have taken a hit in the major capitals (Sydney and Melbourne) this year, however, we have seen excellent opportunities in other markets across the country. We expect 2019 to be a flat year in Sydney and Melbourne, however with solid population growth, low unemployment and low interest rates, growth will return to these markets in 2020-21.
The key markets bfp property remain active in are Brisbane, Adelaide, parts of Tasmania and regional NSW. We remain bullish on these markets and will continue to source quality assets for our clients in these areas. Brisbane remains our top pick for growth in 2019, and this growth is underpinned by strong interstate net migration, government infrastructure spending and housing affordability.
A market to keep your eye on, in our opinion, is Adelaide. We are in the midst of compiling data and researching some of Adelaide’s middle ring suburbs, and so far we are seeing signs of potential price growth. Adelaide is currently experiencing massive growth in private and government investment (namely some $90billion in naval projects for the Defence industry).
A research house we pay attention to (SQM Research) have provided scenario analysis on where the markets may end up. Despite expected declines, SQM Research does not expect a market crash. SQM Research does not expect a general housing price crash to occur in 2019. The conditions required to create such a downturn are not in the housing market at present. The national economy is overall, healthy. Unemployment is relatively low and stable. Population growth is very strong. Oversupply of new real estate is only occurring in pockets.
SQM Research also put out a separate Housing Boom and Bust report, reiterating that the housing downturn will continue into 2019, especially in Sydney and Melbourne. On average, they are predicting a -6% to -3% fall in house prices, continuing the average -4.5% fall of the last 12 months. These figures are based on a Labor government win in the Federal Election, a negative gearing repeal and some capital gains tax changes flowing through.
Other major events are set to play a part in the real estate market in 2019. With the real estate market experiencing a turbulent year throughout 2018 (Sydney and Melbourne specifically), the federal and state elections as well as the conclusion of the royal commission into banking proving will prove to be pivotal points for the market. The direction the RBA takes on interest rates will also be crucial.
bfp property see 2019 as another great year to be investing in property. The growth we’ve seen in 2018 in key locations is expected to continue into 2019. We are quite excited with the opportunities and encourage everyone who is interested in buying to get in touch with us.
Ben Plohl – Founder & Director
**All information published has been collated and prepared in good faith. No representation is given or implied as to its accuracy or interpretation. Please ensure you rely on your own research before making any investment decisions**