10 Predictions for the Property Market for 2017
To assist with your home purchase and investment decisions, we outline the trends we see dominating the Sydney and Melbourne property markets this year.
The recent abolishment of stamp duty for Victorian first home buyers is a significant event in what promises to be another interesting year for Sydney and Melbourne property buyers.
While opinions always vary when it comes to the property market, the industry is commonly predicting an interest rate rise and a modest growth in house prices during 2017.
We believe that downsisers will be very much at the forefront of buying trends as they search for viable alternatives, such as garden apartments or townhouses across in-demand areas.
Here are our insights into what’s happening with buyers across Sydney and Melbourne:
- Many property owners throughout the eastern suburbs and northern beaches are capitalising on record house prices. As a result they are downsizing to apartments and in a lot of cases remaining in or relocating to the east.
- In particular, three bedroom apartments throughout Rose Bay, Dover Heights, North Bondi and Bellevue Hill will be highly in-demand and will result in record sales in many of the more desirable buildings throughout these suburbs.
- We will also see an increase in downsizers looking to buy garden apartments and semi-detached houses with attractive outdoor areas. Properties with the potential to add value through renovation and floor plan reconfiguration will also be in high demand.
- With record low stock levels of units in popular areas, many downsizers will look at securing apartments in boutique blocks off-the-plan, and will only sell their own property when these apartments are close to completion.
- Property prices on the lower north shore have been increasing rapidly and the start of 2017 has already seen a recent rise in sale prices of townhouses in this area. For young families, townhouses offer a more affordable option to semis and houses so expect a lot of movement for this type of housing throughout the lower north shore in the coming months.
- Some pockets of the northern beaches still have a lot of room for growth and there are good opportunities there to purchase solid investments circa 4-5% gross return. Areas recommended for investment apartments include Brookvale, Dee Why, Collaroy; while for houses, Beacon Hill, Narraweena, Cromer and Wheeler Heights all offer good investment potential.
- As the inner west and eastern suburbs become less affordable, more people (especially first home buyers) will be attracted to the outer west in their search for large blocks of land and freestanding houses. An increase in infrastructure including schools, public transport and the Badgerys Creek airport will result in better job opportunities for young professionals moving to the area. With much of its housing commission sold to developers, Mount Druitt is one area that offers affordability and transport links so expect increased interest and a gradual gentrification of the area.
- Investors will also turn their attention to the outer western suburbs in anticipation of higher yields. These investors will be competing with families for the bigger blocks and will also be attracted to the dual income potential of granny flats.
- We anticipate that within the same city there will be significant variations in different suburbs and property types. As an example, we see historic apartments in suburbs within 12km of the Melbourne CBD – particularly in the bayside and northern regions − as presenting superior growth opportunities. This is due to an increasing recognition of the benefits of apartment living, such as accessible public transport; the latte lifestyle; the revival of the CBD as a cultural and entertainment destination; and the historically large gap between the median Melbourne house price of $795k vs apartment median prices of $457k.
So there you have it! Pockets of potential abound and interesting times ahead.