A number of factors suggest that our economy is in good shape
Fear not! The 40 percent property price declines in Sydney and Melbourne, as reported in the media recently, are highly unlikely and currently are no more than speculation.
With so many property reports and headlines flying around, it can be difficult to make head or tail of where the property market is actually headed.
That’s why I wanted to share with you a considered and thoughtful property outlook report from Nerida Conisbee, Chief Economist at realestate.com.au. You can read and listen to her full report, including a state by state overview here but these are the key factors expected to influence our property markets in 2019.
1. Economic growth, jobs growth and wage rises
We have the lowest unemployment in six years, GDP growth is at its highest level in six years and job vacancies are at record levels. Businesses are confident and this should soon lead to consumer confidence and wage growth. The strength of these factors will cushion negative price growth, particularly in Sydney and Melbourne.
2. Lending conditions
The Financial Services Royal Commission’s final report and recommendations in early 2019 should bring more certainty to lenders, who may loosen the reigns a little on their very conservative lending policies. But only time will tell.
3. Return of foreign buyers
While their enthusiasm has currently stalled (particularly in Sydney), we may see foreign buyers return to the market over the next few years.
4. Trump’s trade war with China
Our economic growth is reliant on China’s. A trade war could negatively affect China’s economy and our own – including our jobs market and housing prices.
5. A rapid rise in interest rates
While it is unlikely, the resulting mortgage stress of rapid rate rises would have a negative effect on prices. A steady rise, accompanied by wage rises, should be less problematic.
6. Political stability
With any luck, the political upheaval of Australian politics this year will soon become a distant memory. Greater stability and political certainty can only be a positive across the board.
You can contact me here if you have any feedback or want to discuss anything.