Looking into the Australian real estate market
The battle between Sydney and Melbourne is no longer just about coffee. After generations of a friendly banter, it has come down to heated discussion on whose properties will be more expensive. According to the SQM’s 2016 Housing Boom and Bust Report released in October, while the general Australian property market expects a go-slow phase, Melbourne can outshine Sydney on the property ladder – at least in terms of price growth.
“We believe that Melbourne will be the outperformer of the year followed by the Gold Coast and Hobart. Each of these respective cities are benefiting from the lower Australian dollar,” explained Louis Christopher, managing director of SQM Research (via News.com.au).
People should expect Australian property prices to slow down by as much as 7.5 percent. In fact, according to the predictions under SQM’s 2016 Housing Boom and Bust Report, the average capital city dwelling should see prices rise by as much as three to eight percent in 2016. This will be considered a slowdown when compared to the considerable 9.8 increase posted within 12 months up to June 2015.
Christopher also said that it will be impossible to expect an across the board price collection. He supported the claim saying that the Australian dollar “likely to stay at current low levels, or even fall.” People should also consider the low interest rate environment to add to this.
“We forecast the national residential housing market will slowdown in 2016 predominantly as a result of a slowing Sydney housing market. However we do not believe the market will record a fall in prices for the year,” the official added.
“There might be one quarter, perhaps, where Sydney records a marginal decline. But that should be it.”
Nonetheless, amidst the discussion on price rates, local home buyers may find the market more favourable to them in general. According to Credit Suisse Group AG (via Bloomberg), Chinese demand for Australian property is waning. Credit Suisse analysts Damien Boey and Hasan Tevfik claimed in a note that there were fewer foreign buyers in Melbourne and Sydney. Auction clearance rates are falling in the mentioned regions thanks to China’s economic meltdown and the dimmed consumer appetite and confidence for real estate across the globe.
“Chinese demand seems to have flattened out,” the Credit Suisse analysts explained.
“It is the cyclically poor condition of the Chinese middle-to-upper class which is driving the slowdown in property buying abroad.”
A lot of interesting views here. What do you think?
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