Report: Australia Home Prices Forecast to Remain Flat in 2018-2019

Leading Oxford Economics is predicting that house prices throughout Australia will continue to be flat over 2018-2019, with some markets poised to decline. This is the same prediction from other economic heavyweights.

The new report, Residential Property Prospects 2018 to 2021, found that the residential market is being weighed down by the crunch on investor lending, combined with increasing levels of new housing stock.

With the exception of Hobart, each major residential market had posted a downturn in price growth during 2017-2018, including Melbourne, Sydney and even Newcastle. 

However, according to the report’s author, low interest rates and a fairly steady, though restrained economic situation, was mitigating the prospect of a significant price correction.

An apartment glut is also expected to occur in most capital cities but especially in Newcastle, where investors had in the past pushed the construction market to record levels, according to BIS Oxford Economics.

 

Sydney

June median house price: $1.12 million

The report is forecasting the price drop in Sydney to continue, with prices declining by 2% in 2018-2019.

Prices could moderately increase in 2020-2021 due to a price correction, coupled with undersupply and some strengthening of the economic outlook. However, the median house price is expected to remain beneath the June 2017 peak through 2021.

Given the declining investor demand, the report affirmed that first-home buyer activity was aiding unit prices. Still, median prices for apartments were expected to decline 4% in 2017-2018 and further 3% in 2018-2019.

 

Melbourne

June median house price: $870,000

Demand for housing, where there is an undersupply in the market, continues to be driven by record population growth.

New housing completions are expected to steadily increase through 2018, as the major pipeline of apartment buildings being constructed are close to being completed, and supply will be mostly met by population growth.

House prices are expected to tread water over the next three years, increasing below the level of inflation. According to the report, the incipient slowdown in new housing construction could trigger a moderate increase in prices.

Though the wider market is not forecast to slip into a glut, BIS Oxford Economics expects the emergence of pockets of apartment glut in view of the scope of new unit construction in comparison to houses. Unit prices are expected to drop 2% through 2021.

 

Canberra

June median house price: $700,000

Canberra’s residential market is expected to continue to be a quiet achiever as it has been in recent years.

House prices are predicted to grow 5% through 2018-2019 before decelerating through 2021, ending in total increase of 10% by 2021. Apartments were expected to pose a price increase of 6% through 2021.

A boom in construction in Canberra is forecast to diminish the upward pressure on housing prices.

The reported stated that the rental market in Canberra was extremely stretched, with a 0.7% vacancy rate during the March quarter.

 

Brisbane

June media house price: $550,000

The sunshine state’s broader housing market, which is expected to post moderate price increases through 2020, is being dragged down by a glut in the apartment.

However, there has been an increase in interstate migration, with Sydney residents relocating to Brisbane.

A downturn in construction, combined with an increase in population, will drive median house price by a forecasted 13%, or $70,000, over the next three years.

 

Perth

June median house price: $520,000

House prices in Perth have dropped by 13% since 2014, but the worst of the housing downturn could be done already. House prices seemed to be bottoming out, as evidenced by greater foreign migration and a decline in the number of West Australians relocating interstate.

Vacancy rate is still high at 5.1% and rents have subsided, dropping by as much as 30% since 2013.

According to the report, the upturn of Perth’s market is expected to be a prolonged, gradual movement as the city has to contend with a major glut.

House prices are forecast to keep pace with inflation through 2021, increasing by roughly 10%, while unit price are predicted to increase by only 5%.

 

Hobart

June median house price: $485,000

Hobart has eluded the countrywide trend and posted strong house price increases in recent years. Interstate migration has caused this, with most of the population growth having occurred in Hobart.

But the present flow of migration comprises mostly of younger adults and families with kids, signifying that people are moving due to the affordability in Hobart, or expats returning to raise a family.

The median house price is expected to increase by 5% in 2019, and then relax through 2021. The price for both houses and units are expected to increase by 8% by mid-2021.

 

Adelaide

June median house price: $510,000

House prices will see modest growth in the coming years due to a weak economic environment and dull population growth.

South Australia’s economic environment is forecast to remain muted in the short term, given the high unemployment rate and the closure of automotive production. Buyers are likely to be more wary.

A 9% increase is projected for house prices by 2021.

 

Darwin

June median house price: $505,000

House prices in Darwin have plunged by nearly 20% since 2014. However, the report has predicted prices to have reached its lowest level.

Thanks to a general glut, prices are expected to continue to be flat through the 2018-2019, followed by limited growth over the next two years.

House prices are projected to grow by 5% and unit prices by 4%.

 

Statistics are difficult to find and report on for the Newcastle Region as a whole, however if you wish to know how your suburb has been performing and what may be predicted for the next two years, then ask Annette Pinkerton.  Call her today on 0418447856.

 

 

How to De-clutter Your Hallway

The hallway is that part of the home that can easily become cluttered. Not surprising given that it is where stuff gets dumped – keys, handbags, scarves, shoes and shopping bags.

Though it seems like it’s impossible to get this space organised and free from clutter, there is a way. There are seven ways, actually! Here they are:

  1. Conceal it

Using hidden storage is one of the best ways to remove clutter from your hallway. Some examples of hidden storages are bench seating with inbuilt drawers, stairs with hidden cupboards and a wall façade with a concealed storage closet. For homeowners on a budget, consider hollow footstool-style boxes that also function as small seats.

  1. Go vertical

Aren’t you considering the space above your hallway? Don’t make this common design mistake. Most hallways have ample space above it; all you need to do is to figure out how to use it properly. You can attach hooks to thin shelves built just below the ceiling and use them as modern coat racks. Items that are rarely used like umbrellas and gumboots can be stored up high and out of the way.

  1. Box it

This a great tip especially for families. Buy a box for each member of the family and label one box for each person. Their particular box is where their ‘hallway’ belongings will go, like hats, scarves, shoes, etc. You can also use buckets, hanging bags or baskets.

  1. Think thin

Use thin furniture for hallway storage likes the ones that are designed to be used inside other cupboards. If you have a small hallway, thin shoe racks, thin hall tables and thin boxes will be perfect.

  1. Stack it

Hallways don’t have a lot of space, so you need to be careful how much to allocate for storage. You want to make sure people will not have difficulty moving around. Most people’s biggest storage items are shoes, bags and jackets. The best storage solution for these items is stack them. Use stackable drawers, stackable storage baskets or just stack a few pieces of archive boxes in a nook.

  1. Hang it

The most common items that clutter an entryway are coats, hats and scarves. Having sufficient hanging space can solve a cluttered mess of clothing. Don’t underestimate how many coat racks you would need. Give at least one or two for each family member plus a few extras for visitors. Choose coat racks that can be attached to wall, hanged from a high ceiling shelf or use minimalist wall leaning coat racks.

  1. Display it

There are lots of hallway items are not unattractive to see when displayed. Handbags can be attractive dangling from the walls, scarves can be adorned over furniture and gumboots look beautiful with dried flowers in them.

Tips to Make Your Home a Selling Hit

“How much is my property worth?” This is the question that is foremost in the mind of a seller when they decide to put their home on the market.

And this is a complex question because there are many factors that can influence a property’s sale price.

However, sellers can do some things to help improve the property’s chances of getting an excellent sales result.

Here is how to position your property to achieve selling success:

  1. Begin from the front

Many buyers will see your house first on the Internet, but a significant number of these people may follow up with an actual drive by.

It’s important to ensure the potential buyers’ first impression is a good one. You can boost your home’s street appeal by cleaning up the front of your house and the yard. This will encourage more people to drop by and check out your property in detail.

You can also paint and fix the fence and letterbox. Giving your fence a fresh coat of paint will make your yard appear larger and more attractive.

  1. Small investment, big rewards

Buying a few cans of paint and giving the interior of your home new paint is the most inexpensive way to raise the value of your home.

Buyers look positively on a home with big space. With light, neutral colours, the sense of space within the home is instantly improved.

Go with neutral colours, particularly shades of white, to make the space appear bigger. It also pushes you to pull out some furniture and furnishing because you don’t want the pieces you’d like to take with you to the new home to get painted.

  1. Think carefully about renovations

One major mistake that many sellers commit is overcapitalising with the cost of their renovations.

Experts say that renovations in the kitchens and bathrooms bring the biggest return on investment. However, sellers should proceed with caution.

Don’t spend too much on renovations because most buyers want to give their own stamp to their own kitchens and bathrooms anyway.

  1. Put a shine on those benchtops

Instead of spending thousands of dollars on a complete kitchen overhaul, experts suggest painting the old cabinets to give them an instant boost in appeal then try doing the same with the benchtops before replacing them altogether.

  1. De-clutter

Getting rid of clutter will barely cost a cent. Remove as many of your belongings as possible throughout the period when your home is open for viewing. It makes your home appear bigger, thereby boosting its selling potential.

You’re leaving the property anyway, so if there are things that you’d like to take with you then that would be a big help for your agent in selling your home.

‘Bank of Mom and Dad’ Now Popularity for Majority of First-Home Buyers

The so-called ‘Bank of Mom and Dad’ is now the go-to by majority of first-home buyers. This ‘bank’ represents over $20 billion in property loans following a 25% increase in the last year.

Family lending has grown in popularity due to the massive pressure on the mainstream banks, which have been made to increase rates and minimum deposit requisites as they rush to comply with new laws and forecast future controls.

A study by Digital Finance Analytics found that the Bank of Mum and Dad is now the No. 10 biggest lender in Australia, following Bank of Queensland and leading ME Bank.

Based on 52,000 interviews done for the last 12 months, 55% of first-time buyers are reported to now get financial aid from mum and dad. And the average amount involved for cash loans is $89,000.

Traditional bank lenders are currently experiencing immense pressure following the discovery by the royal commission of prevalent violations of responsible and ethical behaviour.

Now that two rounds of royal commission have been dealt with, the Reserve Bank governor said it might be harder for households to get home loans because of the discoveries.

Is Bank of Mum and Dad accelerating inequality?

Necessity is the main reason for the shift to Bank of Mum and Dad, as property values skyrocket. As a result, the mortgage lending sector is feeling an onslaught.

It is very difficult to save for a deposit, with many lenders asking for a bigger deposit in response to the tightening in the loan to value regulations.

The growing popularity of the Bank of Mum and Dad is a reaction to increasing housing values, against fixed income, and the equity growth people who have already in the market have benefitted from.

However, the opportunity can only be accessed by first-home buyers who have wealthy and generous parents. Children who don’t have rich parents face a major challenge.

Grattan Institute’s major report into housing affordability, released in March, issued a warning on the advent of the Bank of Mum and Dad, saying that it widens the gap between the rich and the poor. It opens the possibility of home ownership depending more on the success of one’s parents than on one’s own efforts.

In Sydney and Melbourne, first-home buyer activity has significantly risen following the state governments’ move to remove or discount stamp duty obligations for first-home buyers.

Concurrently, regulations enacted by the banking regulator to restrict interest-only and investor loans – some of which have already been adjusted – triggered a slump in investor lending, which is also believed to have lifted first-home buyer activity.