The 2019 Forecast for Australia’s Property Market


Financial Services Royal Commission final report & how will it effect the property market this year?

The final report is set to be released early in the year. Though the main spotlight was on home loans, at this point, there a good chance no more restrictions will be imposed on access to finance.

Banks started self-regulating their home loan program when the Royal Commission was launched in December 2017. Because of this, it got harder for people to take out a loan to purchase property.

The full impact of this will be known this month.


The Federal election

More likely than not, Australia will have a Labor Federal Government by mid-2019.

A more stable political environment is welcome news for the property markets, but the possible modification to negative gearing and capital gains tax concessions identified as a major policy are not so much.

If the modifications are implemented, chances are there will be more blows to home values and issues will surface for rental supply.

Whatever happens, the possibility of modifications has already alarmed investors, with home loans to this group dropping 30% from the peak.


Despite a credit crunch not happening, sentiment will be muted

There is plenty of speculation that people on interest only loans and highly leveraged borrowers will be facing problems. However, there are no statistics yet to substantiate this claim.  There is no credit crunch, but a far more muted forecast is seen for housing.

Due to so much uncertainty, especially involving the Royal Commission and the effect of a change in government, many buyers are not moving, just waiting for the situation to ease and this is reflected at our open homes where we are seeing fewer people.


Interest rates on hold

GDP growth slowed down in September, leading to a few commentators to conjecture that interest rates may be reduced in 2019.

However, it seems like the next movement is probably up – though the actual timing remains unclear. The country’s economic growth isn’t constantly robust enough to begin boosting rates.

Price drops in Sydney and Melbourne are forecast to continue.  The situation is Sydney is very challenging and, though it is a little better in Melbourne, the slow start to the year is expected to continue for both cities.

The problem is the uncertainty in the market, ‘til the Royal Commission is settled and the Federal election is concluded, the weak situation will continue.


Hobart and Adelaide will lead

It will be a slow market in the first six months of 2019, but Hobart and Adelaide will be top performers.

Hobart is expected to slow in 2019 but will remain bullish. The heady highs seen in Melbourne and Sydney over the last five years didn’t happen in Adelaide, but this is an advantage for the city.

Paired with expanding job opportunities, the City of Churches is our reported to be the next property hot spot.


To find out what areas in Newcastle are likely to be the next hot spots, call Annette directly on 0418447856 for her opinion.