4 things to expect from the property market in 2018
Fri January 19, 2018
At the start of each year, there is always a glut of news articles offering bold predictions for how the property market will perform over the next 12 months. The trouble with these predictions, particularly in an intensely cyclical and highly unpredictable market such as Sydney's, is that each expert seems to have a different opinion of where prices will go, who will be buying property in Sydney and where the industry is heading. With that said, there are a few things that many property experts do agree on, and in this article, we'll take closer look at four of these to give you a taste of what to expect in 2018.
2017 was a period of ups and downs in Sydney, with prices fluctuating as supply and demand ebbed and flowed throughout the year.
1. Stability in Sydney
2017 was a period of ups and downs in Sydney, with prices fluctuating as supply and demand ebbed and flowed throughout the year. By contrast, many experts are predicting a slightly less hectic market in 2018, with long-term stability making property purchases less competitive as demand slightly decreases.
However, this decrease in buyers and competition doesn't necessarily mean that prices will fall, with realestate.com.au pointing out it's unlikely we'll see in big drops in average Sydney property prices over the next 12 months.
2. Interest rates stable or up
This is an area that sees a lot of conflicting viewpoints, with some believing interest rates will increase in 2018, while others don't think this will happen until 2019. For example, Domain reports that financial markets suggest a rate rise in late 2018, whereas CoreLogic RP Data is leaning towards next year.
One thing that almost everybody agrees on is that there will eventually be a rate increase, and it's simply a matter of when. Although the official cash rate hasn't moved in over a year, we've already seen mortgage rates creeping up, and the smart money is on this trend continuing throughout 2018.
3. More first-home buyers
New incentives rolled out to first-time buyers was one of the stories of 2017, including stamp duty exemptions and discounts. While this hasn't had an enormous impact in central areas of Sydney, where a large proportion of properties are valued above the threshold for these incentives, we can expect to see more and more buyers taking advantage of the new benefits in some of Sydney's more affordable areas away from the city centre.
One of the stories of 2017 was new incentives rolled out to first-time buyers, including stamp duty exemptions and discounts.
For many, this may mean moving further away from the city centre, bringing the focus back to new infrastructure projects such as the Sydney Metro, which will help ensure that getting into the CBD from the outer suburbs isn't too much of a chore.
4. More focus on renters
Finally, expect to see a renewed focus on renting in Australia, and how to make it a better living situation for landlords and tenants alike. This shift will be particularly noticeable in cities like Sydney, where many people simply aren't in a position to buy.
Victoria is currently leading the charge on this issue, with a new bill passed in 2017 introducing longer-term, more stable tenancy agreements. This bill opens the door for better regulation of tenancy agreements for longer than five years, making renting a more viable alternative for those who are not able to buy in competitive markets. Hopefully we'll see similar legislation rolled out in New South Wales over the next year.
These are just a few of the big trends we have to look forward to in 2018. To find out more about what you can expect from your own buying and selling, get in touch with Laing+Simmons today.