The recent country-wide property downturn combined with shrinking interest rates has buoyed the confidence of next home buyers and property investors.
By: Victoria O’Neill, Nov 2019
Driven by incentives, discounts and grants, even first-time buyers across the country have been eyeing the property market. The monthly number of new loans to first home buyers in September was 6.8 per cent higher than the same time last year.
So, is it time for you to put property on your 2020 ‘must do’ list?
As property prices cooled in recent times, so too did the confidence of investors. In 2020, property experts anticipate better times for those looking to build their wealth through bricks and mortar.
CoreLogic and Moody’s Analytics’ 2020 forecast data suggests most markets will see property prices steadily increase in value, with the exception of Perth, Darwin and Tasmania, where further decline is expected.
- Be on the look out for upcoming suburbs and growth areas that are attracting a new generation of telecommuters. Home prices in these in-demand locations are seeing considerable year-on-year growth, such as the 6.6 per cent increase seen in the Hunter Valley (New South Wales) or 12.3 per cent spike in Geelong (Victoria).
In areas where property values remain weak, investors can capitalise on lower sale prices and historically low interest rates – but must seek out opportunities where rental demand is growing.
Real Estate Industry of WA data noted a 16 per cent increase in leasing transactions in October, with 4,678 rental agreements signed. In-demand rental locations in Perth include Baldivis, Morley and Canning Vale.
Many city centres across the country can expect to see robust sale prices, however, outer suburbs may offer the opportunity for next home buyers to think, and live bigger.
According to CoreLogic and Moody’s Analytics, Sydney buyers looking for steady house price growth in 2020 should look to the Central Coast (2.1 per cent), Eastern Suburbs (3.8 per cent) or North Sydney and Hornsby (3.5 per cent). Hot growth areas for the city in 2020 include Baulkham Hills and Hawkesbury (11.1 per cent), Blacktown (10.9 per cent) or the City and Inner South (14.5 per cent).
For Melbourne, steady 2020 price growth areas include Western Suburbs (3.1 per cent), Mornington Peninsula (4.1 per cent) and the city’s Outer East (4.1 per cent). Price growth hotspots include the Inner East (15.8 per cent), North East (9.2 per cent) and the Inner City (8.4 per cent).
Those in Brisbane will find subtle house price growth in Morton Bay South (0.4 per cent), the City’s North (0.4 per cent) and Southern Suburbs (0.9 per cent). Price growth is most likely to be found in the Inner City (3.6 per cent), Morton Bay North (3.3 per cent) and Brisbane’s West (2.8 per cent).
Perth locals should anticipate flat or negative price growth. Prices are expected to decline by as much as 1.7 per cent in the city’s South East and 2.9 per cent in the North East. Positive price growth may be seen in the Inner City (0.2 per cent) and the city’s North West (0.6 per cent).
For those interested in downsizing or adopting a more urban lifestyle, off-the-plan or new build apartments should be on the radar following the West Australian Government’s new rebate scheme announced in October. Click here for more information on the scheme.
Price growth in Adelaide will be mixed. Property in the Central and Hills districts are expected to decline in value (1.2 per cent) while homes in the city’s south may see an increase in value by as much as 4.1 per cent.
- Whether you’re looking to upgrade in a hot market, or to take advantage of lower property prices and interest rates to purchase a property that might be out of reach in other conditions, you’ll need to have your finances in order so you can act quickly. Be sure to speak to your lending specialist or the State Custodians customer care team to know what your options are.
Despite recent gains made to property prices in October, home values are still 5.7 per cent below their 2017 peak, so there are still good buys to be had… for now.
CoreLogic anticipates house values nationally will rise by 7.7 per cent in 2020 and 7.6 per cent in 2021. Apartment prices are expected to rise even more with a 7.9 per cent increase expected in 2020 and an 8.4 per cent rise predicted for 2021.
- Each state and territory has its own First Home Owners Grant Scheme to help buyers get their foot on the property ladder. The rules in each state are different so be sure to do your homework to know what you may be eligible for.
The opinions expressed in this article are the opinions of the author(s) and not necessarily those of State Custodians. The above is general commentary only and is not advice tailored to any individual’s financial situation. We recommend seeking advice from a finance professional before implementing changes relating to your finances.
See if you qualify. To get a more accurate idea of how much you can borrow with State Custodians, click here.