Good news for property investors: the Australian housing market is set to perk up in the next two years.
That’s according to the 2019 August CoreLogic Hedonic Home Value Index, which revealed that the Reserve Bank of Australia’s rate cuts and the easing of credit standards would result in a pickup in the property market.
“Our long-held baseline forecast—that the trough in the national housing market has occurred—is evident in improving activity in the Sydney and Melbourne markets, where 60 per cent of activity takes place,” said Moody’s Analytics economist Katrina Ell.
“Improved auction clearance rates in these cities, alongside the return of monthly dwelling value growth, according to CoreLogic data, support the outlook for ongoing improvement.”
The housing market has also been “particularly responsive” to RBA’s rate cuts, which have been closely reflected in the lending rates, Ell added.
“Much of the strength in house prices and construction during the most recent boom was thanks to the decline in interest rates.”
Sydney and Melbourne is predicted to see growth of 7 per cent or more in the next year and the year after, with Brisbane, Adelaide and the ACT also set for positive growth.
Meanwhile, Darwin, Perth and Tasmania and the NT will see some dips either in 2020 or 2021.
Here’s what property values are forecast to like in every Australian state in 2020:
New South Wales
The NSW capital’s recent property market correction has been “the longest and steepest on record for the Sydney market,” Ell said, but is also looking to be emerging from this correction.
House values are set to rise 7.7 per cent next year and 7.6 per cent in 2021, and apartment values to jump 7.9 per cent in 2020 and even further at 8.4 per cent in 2021.
All things considered, house values in Sydney are still high and are up 60 per cent from 2012 levels, Ell pointed out: Demand has risen for more affordable areas outside of Sydney, such as the Hunter Valley, which have become attractive for those who work in Sydney but can’t afford property within the city.
The correction in house values will continue for the rest of 2019, with some of the sharpest declines predicted in Melbourne’s Inner South, Outer East and Inner East.
But some of the same areas will see a pick-up come next year.
“A stronger recovery in house values is forecast going into 2020 and 2021, driven by improvements in most suburbs, including a notable pickup in prices in Melbourne-Inner East and North East,” said Ell.
“In 2020, a strong recovery is predicted for most suburbs; unit values in Greater Melbourne are predicted to rise by 4.8 per cent, though values in the West and South East suburbs are likely to grow at a relatively weaker pace.”
Keep on top of the latest Property news and updates by signing up for our newsletter here.
Never miss out on anything again- we will compile all the stories you need to know.