realestate.com.au Property Outlook: Four capital cities see increases in 2018
We are now well and truly in the midst of a housing downturn。 While conditions remain highly variable across Australia, the Property Outlook report shows only four capital cities saw price increases in 2018 with the rest recording declines。 Across regional Australia, conditions are even more variable。
The realestate.com.au House Price Index is showing that declines are far less severe than what many other commentators are saying. There is no doubt we are seeing price declines in Melbourne and Sydney, but they are not as pronounced as first thought; and we are certainly not seeing the worst conditions in 30 years. In most other capital cities, prices are either stabilising or seeing moderate growth.
The Property Outlook report shows the capital cities continuing to record growth are Hobart, Canberra, Adelaide and Brisbane (in order of price growth)。 For regional areas, it is Victoria that is doing particularly well with Ballarat seeing the strongest regional price growth in Australia。
Prices will continue to fall in the first half of 2019 with the outcome of the Financial Services Royal Commission and Federal Election likely to dramatically impact the direction of the market。
Top 10 most in-demand suburbs in Australia
What’s happening in each capital city?
Sydney has been hit hardest by tougher lending conditions and uncertainty around investor incentives. Prices have now fallen 6.7% from the peak and there is the potential for another 5% fall in the first half of the year. From there, it will depend on the final outcome of the Royal Commission and what happens to investor incentives if we see a change in Government.
Melbourne’s performance is certainly a lot stronger than Sydney and while the city has been hit by the same finance restrictions, it does seem to be supported by jobs growth. It will take some time to get a clear read on what is happening with jobs, but the demand from renters in the city suggests that jobs are being created and people are continuing to move to Melbourne. Ultimately, this is underpinning housing demand which is stemming the price falls – now down 2.5% from peak and 1.5% over the past 12 months.
Brisbane is up against it – it is still dealing with a hangover of too many new apartments and is under the same national issues of finance and changes to investor incentives. Despite these challenges, the market is holding up and seeing stable prices.
Inner City is doing the best with prices up 2。2%。 Usually a small price rise like this wouldn’t be much to get excited about, but when compared to some of our toughest markets in Sydney and Melbourne, it is looking almost boom like。
It is the second strongest market in Australia and set to benefit from a change of Government。 This is partly because Labor Governments tend to employ more staff but also because the need for consultants in the early stages of a new Government is generally high。 With more jobs comes more people and this will drive both buyer and renter demand。 Price growth over the past 12 months is 1。35% and even though Canberra is under the same national pressures, it seems unlikely these relatively flat conditions will turn negative in the first half of the year。
One of only four capital cities to experience price growth over the past 12 months, Adelaide is defying the odds. The city’s median has hit the highest level recorded and there is no region experiencing price declines. There are now also three suburbs featuring in the most in demand in Australia – Crafers West, Aldgate and Belair – all of them in the Adelaide Hills.
When will this market start to slow? The city didn’t quite hit double digit price growth for the past year, but it wasn’t far off. While we saw some concerning signs around rental demand starting to emerge, it doesn’t seem to have dented buyer activity. Two of the most in demand suburbs in Australia are in Hobart (Battery Point and South Hobart) and the suburb that is moving quickest up the most popular list is Carlton. 2017’s quickest moving suburb, Margate, saw price growth of over 18% in 2018, double that for Hobart which suggests that Carlton will outperform the market. Hobart is set to continue to see price growth in 2019.
足彩胜负14场The stop start nature of Perth’s recovery appears to have stalled and we are now continuing to see price falls. At a regional level, the price declines are pretty random however the north-east is struggling the most. While the Melbourne and Sydney house price boom was brought to an end with the announcement of the Royal Commission, this has completely stalled Perth’s recovery which was starting to gain pace in 2017. If access to finance improves this year, it will be a positive for house price growth in the city.
Darwin’s long-term price slump continues, showing almost exactly the same decline in prices as Perth。 Like Perth, any recovery in Darwin is stop start and has been completely derailed by the Royal Commission。 Any improvements to financing will be positive for this market。
Nerida is REA Group's chief economist and one of Australia’s leading property experts。 She provides regular market commentary to a wide range of Australian media outlets across digital, print, television and radio。 She also contributes content for REA Group’s websites including realestate。com。au and realcommercial。com。au。View profile for Nerida Conisbee