Yahoo Finance 8 property predictions for 2019
Considered the ultimate safe haven by many, Australia’s declining property market has left many Australian homeowners feeling jittery.
And with possible, and controversial, changes to negative gearing around the corner, we can expect an explosive year for property in 2019.
Here’s what’s in store.
Property values will continue to fall
Property analysts at CoreLogic predict values will fall further. Values fell 4.1 per cent in the 12 months to November 2018.
Sydney and Melbourne will lead the fall but Darwin will kick off a long recovery. Perth’s property market could also shift into positive territory.
Tight credit conditions will continue
And that means the softer outlook will continue. CoreLogic’s head of research Tim Lawless explained the tighter lending environment, triggered by both regulatory and Royal Commission scrutiny, will dampen activity.
Low consumer sentiment will bite
Australians’ confidence in the housing market is starting to wane and touted changes to negative gearing and capital gains tax could exacerbate the situation.
Sydney and Melbourne’s new unit market pose risks
The unit markets in these two cities will suffer from slower demand and a higher supply. Fewer foreign and domestic investors and slower migration rates are all to blame.
‘Lifestyle markets’ will remain popular
Coastal and hinterland regions are surging in popularity as retirees and those disenchanted with city life seek greener pastures.
“Growth conditions aren’t likely to be as strong as last year, however the trends suggest values will continue to trend higher through the year,” Lawless said.
“As the most popular coastal markets become unaffordable, demand may spread further afield. We have already seen this trend across markets like Newcastle and Wollongong, where affordability constraints have slowed conditions across these areas.”
Politics will have a big role to play
As CoreLogic noted, Labor’s proposed reforms to negative gearing have the potential to dampen sentiment.
Head of real estate group, Starr Partners’ Doug Driscoll also believes the government will be busy addressing the challenges in implementing the recommendations from the Royal Commission.
“It is a genuine balancing act, as the Government needs to ensure future prudence, but also ensure that people are able to easily access credit,” Driscoll said.
First home buyers’ day in the sun
The landscape has changed and this could be first home buyers’ chance to get on the property ladder.
They have regulator measures designed to curb investor activity and financial stimulus to thank for this.
However that doesn’t mean the problem is solved, Driscoll warned.
“All the pieces of the puzzle are currently in place for first home buyers, and it should stay that way in 2019,” he said,
Borrowers should contest valuations
Prices are falling but banks may try to low-ball mortgagors, Driscoll said.
“Anyone who is struggling to secure lending should contest the valuation. It is possible to request a second opinion, or alternatively, provide extensive comparative evidence for similar properties that have sold in the area.”
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