25 Mar Small Property market on track to slow in 2018 as prices fall in capital cities
Small Property market on track to slow in 2018 as prices fall in capital cities – Fact or Fiction?
The national median house price dropped 0.3% in December, because of falls in Sydney and Darwin!
Australia’s Small Property market is showing signs of slowing down, with national home prices down in December quarter and expected to remain softer throughout 2018.
The national median house price index fell 0.3% in December, weighed down by major falls in Sydney and Darwin and modest weakness across Melbourne and Perth.
The fall contributed to an overall slowdown in national home value growth for the year, with prices rising 4.2% in 2017 compared with 5.8% in 2016 and 9.2% in 2015.
Sydney prices retreated 0.9% in the month of December to be 2.1% lower over the quarter, tracking at just 3.1%;
Small Property values in Melbourne fell for the first time since February 2016, with Small Property value at 0.2% lower in December, but they were up 0.9% over the quarter and 8.9% for the year, however the housing market has been more resilient to negative growth compared with Sydney due to factors such as stronger population growth, lower affordability hurdles and a higher rate of jobs growth.
Hobart was the best-performing capital city in 2017 with Small Property prices rising 12.3%, almost five times higher than the city’s decade average annual rate of capital gain.
However Small Property prices still remain low relative to the larger mainland capital cities
We’re likely to see negative growth rates across previously strong markets, more cautious buyers, and ongoing regulator vigilance of credit standards and investor activity.
However Western Australia’s have been dropping for decade now but it is predicted to end in 2018 with Small Property price rises.
Since the mining boom of recent years a reduction in new home construction has caused the market to pick up and many residential areas seeing strong activity, job growth, continuing low interest rates and recovering demand for office space are also contributing to improve the situation.
The investor market will be stronger, driven both by local investors trying to time the market and interstate investors seeing Sydney and possibly even looking for an alternative.
There is still an oversupply of rental properties, keeping rent low, however this has likely peaked and rents will rise in the coming months as students seek accommodation in Perth.
There are now profitable times ahead for the Perth Small Property market!
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