Apart from the weather, right now there is nothing hotter in Australia than property. Whether you’re an investor, first-timer or a seasoned owner-occupier, there has been a media storm surrounding property at this moment.
The question everyone is scrambling to unwind however, is whether these good times in Australian real estate will continue. Some seem to believe that 2017 will be the year when the market finally slows down.
Are we about to crash?
The Australian housing boom has been a major player in contributing to our economy. CoreLogic’s RP data reported that capital city dwelling values soared by 10.9% through 2016. This represents the highest gains since 2009.
There is no doubt that it has been a huge year for real estate, despite what many people believe about the state of the Australian real estate market. This scepticism isn’t totally unjust though, with some areas outperforming others considerably.
Cities such as Sydney topped growth charts at 15.5% growth, followed closely by Melbourne and Hobart. The only city to see negative growth in this cycle was Perth; although they have managed to turn it around in the last few months.
Major gains such as these have got people selling up celebrating, but many other property owners are concerned. Some individuals are suggesting that such returns aren’t going to be sustainable into the future; and that every historically large crash begins with an equally historic period of growth.
Such accusations point towards a potential surplus of apartment buildings in many of our cities. This could be evidence that Australia may be floating up in a property bubble that is about to burst.
Or are we going to continue booming?
There are other experts out there who don’t agree with this pessimistic outlook on the property market.
The Housing Boom and Bust Report is predicting another double growth period in 2017. They estimate that this year will be even better than the growth seen in 2016. According to this report, Sydney may see an 18% growth; with Melbourne experiencing a 17% growth in 2017.
CoreLogic and BIS Shrapnel both agree that this positive market trend will continue throughout 2017, although not with the same intensity. These two major entities argue that the Australian property market will grow, but only by between 1 and 5%.
CoreLogic and BIS Shrapnel have made more moderate estimations; with CoreLogic stating that the mismatched housing cycles across industries can make it difficult to predict the growth rate for this year at all.
We are still in the early days right now however, so it’s important to take any predictions with a pinch of salt. If you’re interested in the state of your local property market, why not get in touch with your local real estate agents.