Crunch time for Australia’s booming property markets. Sydney house prices to fall 4% by 2020.; BIS Oxford Economics Residential Property Prospects 2017 to 2020 Report
Tweet Topic Started: 22 Jun 2017, 09:47 AM (4,178 Views)
It’s crunch time for Australia’s booming property markets. New forecasts expect Sydney property prices will fall in the next two years, while Brisbane and Melbourne will quickly come off the boil.
All Australian capital city markets are expected to weaken in the 2017-18 financial year as most tip into oversupply, according to forecasts in BIS Oxford Economics’ Residential Property Prospects 2017 to 2020 report.
In Sydney, median house and apartment prices are expected to fall 4 per cent by 2020. In Brisbane, house prices will increase 7 per cent, while unit prices will fall 7 per cent.
In Melbourne, there is predicted to be growth for houses of 5 per cent over the same time period, but apartments prices would fall 4 per cent.
BIS Oxford Economics senior manager Angie Zigomanis said one driving factor was the falling away of investor demand over the next 12 months due to a tightening in lending.
But this isn’t the first time the researchers have forecasted price falls for Sydney and a moderation for Melbourne.
In a 2015-2018 report, they predicted Sydney house prices would fall 4 per cent over 2016-17 and 2017-18, and Melbourne house prices would grow 5 per cent over 2015-16 followed by a “small fall” in the following two years. This was later revised to modest growth in the 2016-2019 report.
The latest Domain Group data shows Sydney and Melbourne house prices up 13.1 per cent and 15.2 per cent in the year to March 2017 respectively.
Any slowing was yet to be seen by Sydney-based EPS Property Search buyers’ agent Patrick Bright who said home buyers were strong on the lower north shore.
“I’m not seeing the market dropping off in the inner ring – there’s still good interest and we’re still seeing some stupid prices being paid,” Mr Bright said.
He said there was plenty of activity from both upsizers and downsizers in the market, as well as first-home buyers in the $1 million to $1.5 million bracket buying with parental help.
Selective. Worst case scenario a 1% drop per annum?! It doesn't work that way, we all know it will be either exponential growth or exponential declines there will be no inbetween.
That will crash prices all the way back to June 2017 levels. It did work that way last time. Sydney prices fall by a few percent when the last boom ended in 2003, and then stagnated for nearly a decade.
2003 was not a recession or any other form of economical downturn. Prices detached from wages from 1996 to 2001 where they became seriously unaffordable at 10x+ income. They remained seriously unaffordable since so banks and governments pushed hard to get home owners to buy investment properties, build their retirement using their PPOR.
Credit standards dropped significantly from 2003 onwards and the credit bubble started to inflate and has kept inflating since.
There's a bit more to it than that Chris. Credit is cheap and easy in Japan. In Perth too for that matter. Yet house prices have been going backwards for a long time.
There's a bit more to it than that Chris. Credit is cheap and easy in Japan. In Perth too for that matter. Yet house prices have been going backwards for a long time.
The bi product of cheap and easy credit, a consequence not realised in certain capitals yet but it is a matter of time, unless you believe the whole east coast is exempt from the basic laws of economics?
There's a bit more to it than that Chris. Credit is cheap and easy in Japan. In Perth too for that matter. Yet house prices have been going backwards for a long time.
Yep- Japanese learnt their lesson about cheap credit and irrational exuberance.
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