2015 Property market predictions
So, we have arrived in the year 2015. According to the classic 80s film, Back to the Future II, this is the year that we should be travelling about in flying cars and zipping about on hover boards. However, (sadly for me) this is not the case, but if you are concerned about property, then 2015 could be the year for you.
The best indicators to help judge this year is to look at the economy, where we are in the property cycle and the state of the property market. Since 2012, Sydney has seen home values significantly rise (31.2%) and is in the boom phase of the property cycle, whilst growth has been more moderate in capital cities including Melbourne (17.6%), Darwin (17.5%) and Perth (15.5%) according to statistics from RP Data. Other areas across Australia have grown at a slower rate.
Fast forward to the present day, the economy is still growing, but at a slower pace than the last couple of years. Most of the capital cities are either in the upswing part of the cycle meaning that cities such as Brisbane can look forward to an even greater year than 2014. However, as Sydney is at the peak of its cycle, prices are still going to increase, but at a much slower rate than in 2014.
As prices are becoming even more expensive in Sydney, buyers especially first home buyers are finding it increasingly difficult to enter the market. This might mean that there will be more demand for housing in the regional areas of New South Wales, Victoria and Brisbane as people look outside of the main city areas for more affordable options.
The economy might be slowing down, but there is some good news for property owners in terms of interest rates which are expected to stay low in 2015 and might even see a further drop in the latter part of the year.
So, if 2015 is the year that you are looking to buy a property then you should definitely have a plan in place of what you are looking for as there will be a higher level of demand than there is supply. With more competition it is important to act quickly to get in first. Talk to your broker to find out exactly how much you can borrow and your property search can start from there.
If you are looking to buy a property as an investor then you can really take advantage of the low interest rates, which will provide lower mortgage repayments. Investors will also continue to be one of the main drivers of housing demand, especially in the capital cities such as Brisbane.
In comparison to a strong capital growth, rental growth remains fairly low and steady which means rental yields are trending lower which favours tenants.
On the other hand, if you are looking to sell, then 2015 could be the right time for you due to fewer properties for sale which pushes the sale prices higher, especially in the second half of the year.
Overall, 2015 will be an interesting year to watch, especially as the unemployment rate is at its highest level in over a decade, combined with a low household income growth. This will affect the confidence of consumers and those looking to buy property this year.
Published on 6th of January 2015 by Marty Stanowich