Due to recent signs of softening in the Sydney property market, some analysts are saying that the five-year long housing boom could be coming to an end.
However, Douglas Driscoll, CEO of Starr Partners, said the Harbour City could expect house prices to rebound next year.
“We saw prices drop slightly at the end of 2015, and we’re seeing this again at the end of 2017, which is possible evidence that prices could rebound once more,” Driscoll said. “Overall, I think we’ll see the median house price grow by around three to five per cent in 2018, but I’m expecting the market to become increasingly nuanced with some areas experiencing as much as 10 per cent growth, while others could go down as much as five per cent.”
Overall, analysts have diverging opinions when it comes to forecasting Sydney’s price movements.
A recent article published by the Domain Group collated the forecasts of various analysts, including Shane Oliver, chief economist at AMP Capital; Stephen Koukoulas, managing director of Market Economics; and Hans Kunnen, chief economist at Compass Economics.
When it comes to house prices, Kunnen expects a strong growth trajectory in the bracket of 5%-10%, partly due to robust population growth and a strong state economy.
“Interest rates are not expected to rise and current APRA regulations seem to have stemmed the excesses of investment lending,” he told the Domain Group. “While pockets of oversupply may occur … there is also likely to be reasonable demand and access to finance.”
When it comes to apartment prices, Oliver believes prices will decline by 7% over the next 12 months, while Koukoulas predicts a more modest 2% drop. If they’re right, Sydney’s current apartment median of $758,000 could drop to between $705,000 and $750,000 by June 2018.
Oliver expects another round of tightening measures from the Australian Prudential Regulation Authority (APRA) and cooling demand from foreign investors.
“This, along with a surge in the supply of units, will likely result in falls in unit prices and a slowing in home price gains,” he said.
QBE: House Prices In NSW To Decline
Real Estate App Scores Sydney Neighbourhoods
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.
We value your privacy and treat all your information seriously - you can check out