Autumn 2017 market wrap
Autumn Sydney market holds steady
The past quarter from March 2017 has seen the dwelling values for Sydney remain unchanged as the market holds steady into winter. Locally, we have noticed a continuation of high demand feeding momentum in the Eastern Suburbs market.
The past month of May has seen a cooling in Sydney’s growth with a few factors contributing to this slowed growth. One of those factors is the dent in consumer confidence and the recent upward trend of mortgage rates.
With the recent changes in investor lending, we are also noticing a shift in buyer activity from investors to owner occupiers as investors are experiencing more difficulty in getting loan approvals.
Wage growth remains muted with unemployment remaining high, and therefore expectations are that the RBA will leave the cash rate on hold for the foreseeable future, and we may even see an interest rate cut again.
What are your market expectations heading into the winter of 2017?
Will the prices cool down over the winter months?
We believe that housing values will continue to rise over the coming year, although we expect that the growth rate will be less than what we have seen in the start of 2017. This will mainly be due to the increase in rates from the banking sector and the growing affordability issue for purchasers. Other factors include tighter regulations on investor lending and decreased consumer confidence.
Commercial property sales are still quite strong for the city and city fringe areas which we forecast will remain that way for the rest of 2017.
It will be interesting to see how the new first home buyer package from the NSW Government will impact the market in the near future. Whilst it will certainly help the housing affordability issue, one thing is for sure that the introduction of this new package will not quell the calls for further reform from the Government.
As for the Sydney rental market, we have seen some effects of the recent surge in new housing and forecast that rental growth will be low over the coming year with even more stock in the pipeline.
