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Property Predictions for 2016

Buyers urged to “think local” and base decisions on supply and demand, says national association of buyer’s agents.

REBAA warns against believing dire predictions

The Real Estate Buyers Agents Association of Australia (REBAA) is warning home buyers and investors not to listen to dire property predictions for 2016. Instead, buyers should “think local” and base their decisions on supply and demand.

President Rich Harvey says, “There are more than 700 suburbs in Sydney, more than 540 in Melbourne and around 450 in Brisbane. So to say that ‘Sydney will rise by 4%’ can give a misleading perception to a novice investor, thinking that buying an over-priced off-the-plan apartment will see price growth.

“It is far better to think long-term and become an expert in the local housing market and make informed decisions accordingly.

“Buyers need to ensure they understand the local growth drivers of supply and demand, and that they are in the right price pocket for that particular location.”

Property industry predictions for 2016

Gold Coast picked to win every race

  • LJ Hooker, CEO, Grant Harrod: The Gold Coast is the place to buy property in 2016 because it’s the site of the upcoming Commonwealth Games, it’s currently still affordable, and we have a falling Aussie dollar for overseas investors. Expect growth of 5-10% in Gold Coast property prices.
  • McGrath Real Estate, CEO, John McGrath: The Gold Coast, the Brisbane CBD, and Wollongong will all grow in 2016.

Melbourne will be the new Sydney

  • SQM Research, Louis Christopher (a.k.a. the man who predicted Sydney’s 20% housing boom in 2013): Melbourne will out-grow Sydney in 2016. Perth and Darwin prices will continue to fall. Housing price growth will slow dramatically in general, but we won’t see a crash.
  • LJ Hooker, Head of Real Estate, Christopher Mourd: Prices are likely to become more consistent in 2016.
  • Advantage Property Consulting, Director, Frank Valentic: Melbourne will be a buyer’s market in 2016. “Vendors have had their time to shine for the last three and a half years, now it’s time for buyers.” However, expect Melbourne’s apartment market to struggle with oversupply and new APRA regulations on investment loans.

Growth will fall: Keep calm and enjoy a buyer’s market

  • HIA, Senior Economist, Shane Garrett: The price growth of 2015 can’t continue.
  • REINSW, Deputy President and Cunninghams Real Estate Principal, John Cunningham: The Sydney housing boom peaked in the last weekend of September and it has now ended. Prices will stabilise in 2016 but don’t be afraid if prices go down for a while. “Whenever the market peaks – and we had minor peaks in 2007 and 2010 and a big peak in 2003 – there’s always a slight correction.”
  • Hocking Stuart, Director, Rob Elsom: 2016 could be a year full of auctions, in favour of the buyer. Hocking Stuart has already booked in more auctions for February than ever before.
  • Aussie Home Loans, John Symond: Sydney and Melbourne markets will lose steam in 2016.
  • Century 21, Chairman, Charles Tarbey: Over-stimulated markets will see a big adjustment. “I would be very surprised if there wasn’t negative growth in some parts of Sydney.”

Growth will continue to increase

  • Ray White, Chairman, Brian White: Property prices are still on the increase, and Sydney will continue to lead the way in 2016, although in a more subdued manner than in 2015.
  • Domain, Senior Economist Dr Andrew Wilson: Property prices will rise in regional Victoria and the Surf Coast.
  • ANZ, Senior Economist David Cannington: Expect a modest rate of 2% growth in Queensland, 3% in NSW, and 3% in Victoria.

REBAA recommendations for areas to avoid or buy

REBAA has thoughtfully provided a list of property investments to avoid or recommend in 2016, which we have summarised as follows. Please note that this is general advice from REBAA and shouldn’t be considered as a recommendation or as CANSTAR opinion.

Brisbane

Be careful of: High density apartments in the CBD, West End, and Fortitude Valley.

Consider: Character houses in low density, established areas with good schools, transport and lots of renovation activity.

Sydney

Be careful of: High density, off-the-plan apartments. Mascot, Zetland, Parramatta, and Rhodes all show oversupply.

Consider: Blue chips suburbs with growth potential, such as eastern suburbs, North Shore, and inner west. Suburbs with lifestyle appeal, new transport infrastructure, and growing population.

ACT

Be careful of: High density apartments.

Consider: Small, boutique, existing townhouse developments. Homes in established areas with access to good schools such as inner north, inner south, Belconnen and Woden.

Melbourne

Be careful of: High density apartment blocks. Docklands, Fisherman’s Bend, and other areas oversupplied (or soon to be oversupplied) with new high-rise blocks.

Consider: Low density developments with manageable ongoing running costs. Land is in short supply, so you should buy some if you can afford it.

South Australia

Be careful of: Off-the-plan apartments in Adelaide’s CBD.

Consider: Middle-ring suburbs, properties with development potential. Suburbs on the fringe of established locations, character properties with renovation potential.

Tasmania

Be careful of: Investors should avoid lifestyle properties away from the major population centres. (But these are great if you plan to live there.)

Consider: Character properties in or on the fringes of inner city Hobart suburbs such as North Hobart, New Town, and West Hobart. (Buyers are currently out-stripping supply here.) A well-priced renovator property would do well.

Western Australia

Be careful of: Developing suburbs on outer northern and southern metropolitan fringes of Perth (oversupply expected to continue for 12-18 months). Units (oversupply expected to continue for 12-24 months).

Consider: House-plus-land within 10-20km of Perth. Rentable older houses.

 

REBAA was founded in 2000 and is Australia’s leading national professional body for buyer’s agents. For more information, visit rebaa.com.au

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