The Real Estate Buyers Agents Association of Australia (REBAA) today revealed its predictions for the 2017 spring property market.
- Better buying opportunities in Sydney with stock levels higher than at the same time last year seeing clearance rates predicted to fall close to 60 per cent by summer and a return to a more balanced market.
- In Melbourne’s inner ring, the property market continues to remain strong with competition coming from downsizers who have targeted inner-urban lifestyles and upgraders who are searching for their family home. Three and four-bedroom properties are in short supply in areas defined by small Victorian cottages with sales results exceeding agent and vendor expectations on a regular basis.
- In Brisbane established property within the inner and middle ring suburbs remain popular but currently there is an undersupply of quality property to choose from. The higher end of the market is seeing strong interest and showing positive signs of growth and demand.
- Growing number of investors looking to Canberra for its balance of long-term capital growth and higher yields over Sydney and Melbourne. Lack of stock forcing prices in most areas to rise and competition to remain strong. Anticipated increase in stock this spring expected to take some of the heat out of the market.
- In Adelaide the increasing popularity of auctions and a market characterised by fragmented property growth is creating uncertainty with buyers. This is likely to continue throughout the spring/summer period with prices expected to increase more rapidly in some areas over the next few months.
- A two-speed residential market continues to dictate the Perth property market with demand high for upgraders in certain suburbs but limited demand in others. Increased interest from interstate and international investors who see opportunity in Perth being a more affordable market as it approaches the bottom of the market cycle.
- A combination of increased migration, interstate investment in Tasmania and major projects will continue to drive property prices upwards in Hobart and the southern states of Tasmania this spring and well into 2018.
REBAA president Rich Harvey said buyers should concentrate less on the property cycle this spring buying season and more on researching the market.
“Our philosophy remains the same; there are opportunities in whatever market you decide to buy in,” said Mr Harvey.
“At any time of the property cycle we’re in there will always be some areas, some suburbs and even some streets that have not experienced the same growth as others along with property types that are at difference stages of the property clock.
“If you have the money buy now and if you are prepared to do your due diligence, you can buy well in any market.
“In this environment it’s wise to get an expert on side.
“Buyers agents are qualified real estate professionals who understand exactly where the market is, what a property is worth and they are highly skilled negotiators.”
According to REBAA NSW representative Sebastian James from Hunter James, the tide is finally turning in Sydney with buyers expected to see a slow return to a more ‘balanced market’ this spring.
Mr James predicts stock levels will be higher at the start of the season than at the same time last year and will continue to increase as vendors attempt to catch the tail of the boom.
He warned buyers not to be afraid to negotiate in the current climate with many properties beginning to sell below initial expectations, especially in the middle and outer ring of Sydney suburbs.
“As we continue to come down from the peak of the boom we anticipate well located quality inner suburban property will continue to achieve strong results in the spring market however with clearance rates falling below 70 per cent coupled with increasing uncertainty, buyers would be wise to take a more cautious and patient approach.”
In Melbourne demand is expected to outstrip supply placing further pressure on spring property prices according to REBAA VIC representative Leigh McConnon from Buyers Advocate.
“This is likely to be magnified by the first home buyer market which has been supported by state-based incentives to remove stamp duty for properties under $600k with a sliding scale up to $750k,” said Mr McConnon.
“This price point is likely to be particularly strong.”
Mr McConnon reassured buyers that while price growth was occurring across Melbourne, it was still possible to buy a property under $600k with some land within close proximity to at train line and shops within 15km of the Central Business District (CBD).
“This is likely to be a two-bedroom villa in the northern or western suburbs however this represents great value, particularly when apartments are often selling for more with little or no outdoor space,” he said.
REBAA QLD representative Zoran Solano from Hot Property Buyers Agency said the Brisbane apartment market would continue to soften with the unit oversupply set to worsen as large developments approach settlement later this year.
He said the focus was on established property within the inner and middle ring suburbs of the CBD with continued demand but chronic undersupply of quality property to choose from.
“We are also seeing a clear downsizers movement here in Brisbane as the older generation move out of the large family home into smaller lower maintenance properties,” said Mr Solano.
In the nation’s capital the biggest challenge this spring will be securing a property in a rising Canberra market according to REBAA ACT representative Claire Corby from Capital Buyers Agency.
“Spring is a busy time in Canberra as many employees and students begin their search in anticipation of being settled for the new school year or employment commencement in 2018,” said Ms Corby.
“It’s a time of transition, with workers and their families being posted in or out of the revolving door that is Canberra.
“We’re seeing a growing number of investors turning to Canberra for its balance of long-term capital growth and higher yields over Sydney and Melbourne and they’re closely following local infrastructure projects.
“I’m hoping for a higher number of properties for sale this spring which will ease competition and stabilise prices.”
In Adelaide a fragmented property market is making it difficult for buyers to judge ‘fair market value’ says REBAA SA representative Paul Siwek from Logica Property.
He said in an uncertain market, buyers were more vulnerable to overpaying.
“Over the past two to three years, some suburbs and types of property have shown capital growth up to three times higher than in other areas,” said Mr Siwek.
“Another trend seems to be the popularity of selling by auction, particularly in the more wealthy, inner-ring suburbs and also by the ‘best offer by’ method.
“As market values are harder to judge, lack of advertised prices makes the buying process more stressful and buyers are more prone to overpaying than ever before.”
Perth’s two-speed residential market is seeing strong interstate buyer demand and strong local demand in certain suburbs.
“For the first time in years we are seeing interstate buyer demand as international and interstate investors look away from overcooked markets like Sydney and Melbourne,” said REBAA WA representative Ben Lamers from LMW Property Advisors.
“We’ve also got a seriously hot upgrader market where, in certain suburbs, stock is incredibly tight and buyers are stumbling over each other to get an offer in.
“Yet two suburbs away, you may find a severe oversupply of stock, limited buyer demand and vendors having to aggressively discount asking prices to enact a sale. “
According to Mr Lamers, the upgrader market was looking to acquire quality residential family homes with the suburbs of Floreat, Trigg and Mt Claremont seeing values increase above 10 per cent for particular property types.
On the flipside, values in the outer developing suburbs of Alkimos, Baldivis and Ellenbrook were still on the decline with these suburbs heavily oversupplied, he said.
REBAA TAS representative Rob Zubin from My Property Hunter said the Hobart market was the strongest he had seen for the past 12 years and would continue through spring and well into 2018.
“Hobart and areas particularly in southern Tasmania continue to be a strong and buoyant market as it has been for the past two years,” he said.
“All expectations are that the market will be strong for another 18 months to two years.
“Over that time there has been significant buyer interest with limited stock increasing property values.
“The major projects currently underway in Hobart including the redevelopment of the Royal Hobart Hospital, numerous hotel, university projects and various retail precinct upgrades are also contributing to a much more confident economy.
“The reality is we are seeing more and more people moving to Tasmania for lifestyle plus investors locally and also interstate investing in Tasmania simply because they can’t afford to buy in their own markets.”