5 Key property market trends to watch out for in 2017
According to a recent whitepaper released by the real estate franchise LJ Hooker, the property market during 2016 stayed much the same as it did in 2015. This was mainly down to interest rates, supply, employment and population growth seeing little change.
The whitepaper stated that, “If anything, these metrics moved further in favour of buyers, with interest rates cut twice and the national unemployment rate tightening over the course of 2016.”
So what will 2017 mean for the property market in Australia? Here are five key trends that LJ Hooker has identified that will be influential next year.
1. Rise of the Renter Over the last two years many households have opted to rent over buying a property. This is primarily due to three main factors: affordability, investor demand and new supply.
Housing affordability over the past 12 to 18 months has deteriorated making it far more expensive to buy right now, with renting much more attractive.
With interest rates at an all-time low, more investors have been entering the market, which has allowed many more new apartment developments to commence. However, with an increase in the number of investors entering the market, rental vacancy rates are expected to rise providing greater choice for tenants, whilst rental growth will remain flat.
With new supply entering the market, particularly in suburbs closer to the city, more lifestyle opportunities for renters have come about to suit those looking to live close to work, retail, restaurants and schools.
According to iBuyNew, 2017 will also be a good year to become a rentvestor if housing affordability is pricing you out of buying a home to live in. Instead of buying a property in your home state where prices could be going through the roof such as in Sydney, rentvestors can take advantage of more affordable property prices in Brisbane as well as better growth which the city is expected to see over the next few years. This allows you to get a foothold in the property market, whilst continue to rent in an area you want to live in.
2. The sharing economy New innovative and disruptive technologies have rapidly come on board in 2016 and this will continue to shape the environment around us next year. One way these new technologies will affect us is how we build our homes going forwards. For example, building a granny flat or bedroom with a private entrance for short or long term tenants. This will affect the way we use our homes to live, make and save money as well as maximise our leisure time.
Some new technologies that have really taken off this year include Uber, Airbnb and Divvy allowing us to rent out our investment properties, travel around our cities with ease or rent out our parking spots or garages to earn an additional income.
Developers and strata managers are also starting to provide shared car services to reduce the need for private and on-street parking in new apartment developments and this will become more popular moving into next year.
At iBuyNew, we have just launched a brand new technology allowing buyers to reserve a property from anywhere in the world 24/7. Instead of finding a time to sit down and speak with a Property Consultant and go through floor plans, price lists and project documents, buyers can use iBuyNew’s Online Reservation System to reserve the property of their choice.
3. The cost of change Many of our cities are now seeing a shortage of supply due to many people staying at home for longer due to the increased cost of moving. This is particularly true for upgraders, downsizers and first home buyers who are put off moving due to the high costs of buying and selling a home.
People are simply staying put, or renovating their existing home, rather than to sell and buy again. In turn, this means the amount of stock and choice in the marketplace is heavily reduced, putting added pressure on buyers who face fierce competition. The rising state government taxes, fees and charges are mainly to blame for this.
However, one way of getting around higher property costs is through buying property off the plan where entry prices are far more affordable. Buyers only require a 10% deposit upfront and you don’t have to pay anything until settlement, which could be one or two years away. Buyers also have greater choice, meaning there is less competition to go up against.
4. Picking apartment pockets 2017 will see a greater amount of new supply coming to market, particularly in Melbourne, Sydney and Brisbane. This means that it is now even more important to do your research and buy in a suburb that is not too heavily concentrated with new stock. You should also look into the future and see whether there are any more developments planned as too much stock in one suburb can cause oversupply alongside high vacancy rates which you want to avoid as an investor.
However, it is important to bear in mind that once all of this new stock is absorbed in the market, there will still be an undersupply of property due to the growing population in our major cities.
5. Love thy neighbour Due to the rapidly growing population in our major cities, the need for new dwellings is at an all-time high. This need for new dwellings has led to densification of suburbs around Australia and so councils need to rezone residential, commercial, industrial and rural areas to make the way for higher density developments, mainly high rise apartments.
The re-zoning of land has created the opportunity for neighbours to team up, amalgamate their properties and offer them for sale in-one-line. Today’s demographic want convenience at their feet. They don’t want to live long distances from their workplace or retail and dining opportunities. That’s why the demand for new apartment developments, close to transport, amenities and the city is becoming much more attractive for many, particularly the younger generation including Gen Y.
To find out more about what property buyers and investors can expect from the property market in 2017, get in touch with the iBuyNew team today. Our Property Consultants have years of experience in the property industry and are able to pass on their expert advice, whether you are looking to buy as a first home buyer, or are a savvy investor looking for the next high growth suburb.
Give us a call today on 1300 123 463 to learn more.
Published on 20th of December 2016 by Marty Stanowich