•   
  •   

Money Sydney property prices tipped to fall 10 per cent in 2018

08:25  03 january  2018
08:25  03 january  2018 Source:   smh.com.au

Australian house prices look set to fall in 2018

  Australian house prices look set to fall in 2018 When it's all said and done, 2017 will be regarded as a year of two halves for Australia's broader housing market.The first, a period of rip-snorting price growth, especially in Australia's southeastern capitals, fueled by low-interest rates, strong population growth, lower-than-usual market turnover and an abundance of investor activity.

Sydney property prices are tipped to pull back by up to 10 per cent over the next 12 to 18 months, experts warn, after real estate markets ended the year with a whimper. He predicted Sydney prices would fall by about 5 per cent over 2018 .

Property prices . Sydney house prices are tipped to fall 10 per cent from peak to trough. Photo: Peter Braig. ANZ expects housing prices around the country to fall by 4 per cent in 2018 and a further 2 per cent in 2019.

Illustration: Dionne Gain© Provided by Sydney Morning Herald Illustration: Dionne Gain

Sydney property prices are tipped to pull back by up to 10 per cent over the next 12 to 18 months, experts warn, after real estate markets ended the year with a whimper.

The harbour city is leading the country's property downturn, with prices falling 0.9 per cent in December. Prices were down 2.1 per cent for the quarter, well below price growth of more than 17 per cent in mid-2017, said the head of research at property research data group CoreLogic, Tim Lawless.

Sydney property prices are now 2.2 per cent below the market's peak in August 2017.

The median house price in the harbour city is now $1,058,306, with a median apartment value of $774,124.

Comment: What 2018 has in store for interest rates and house prices

  Comment: What 2018 has in store for interest rates and house prices While the economy is expected to continue its gradual pick-up, it will be somewhat constrained until households begin to feel good again.

15:09 - 16 янв. 2018 г.

National property markets ended 2017 with a whimper, with half of Australia's capital cities recording falling house prices in December. These declines are likely to continue over 2018 and 2019, with research house CoreLogic predicting falls of about 7 per cent for Sydney and Melbourne.

"Sydney's housing market has become the most significant drag on the headline growth figures," Mr Lawless said, with capital cities down 0.4 per cent on average over December.

The lacklustre results were expected to continue over 2018, which was "likely to be significantly different" to the boom cycle of the past few years, Mr Lawless warned.

"We're likely to see lower to negative growth rates across previously strong markets, more cautious buyers, and ongoing regulator vigilance of credit standards and investor activity," he said.

Almost every suburb in Sydney has seen a 50 percent increase in house prices in the last 5 years

  Almost every suburb in Sydney has seen a 50 percent increase in house prices in the last 5 years Nearly every suburb in Sydney and nearly half of all suburbs in Melbourne have posted median house price gains of more than 50 per cent since the start of the five-year housing boom in 2012, research by LJ Hooker shows. Australia's most expensive suburb Point Piper posted a 176 per cent increase in prices, while Llandilo, a growing western Sydney suburb had a 164 per cent increase. Other strong performing suburbs in Sydney include Clareville on the northern beaches, Gosford on the Central Coast and Galston in the northwest.Actual median prices in these areas stretch across a wide spectrum. Point Piper's median price is $12.

SYDNEY and Melbourne house prices have been tipped to fall by 5 to 10 per cent this year as Australia’s property cycle enters a downward phase. Sydney and Melbourne prices to fall in 2018 as housing market turns but a crash is ‘unlikely’.

Inner-city house prices in Sydney plunged by 10 per cent last year for the first time in more than a decade. The decrease in March represented the biggest fall in 13 years according to data released by house price analysts CoreLogic.

"There's going to be a negative growth rate, probably most similar to the 2000 to 2003 [time period] when prices fell by about 7 per cent."

Other experts are predicting declines for Sydney of between 3 and 10 per cent. Sydney recorded 3.1 per cent growth in the year to December 31.

Mr Lawless expected the market's slide from "peak to trough" to take 12 to 18 months. "The market peaked in August for Sydney, so we've already seen four months of the slowdown."

Joanne Seve, a Sydney lawyer and specialist in state-based taxes said the predicted market decline would be "really bad news for NSW revenue".

Transfer duties, including transactions of all kinds, amounted to slightly less than $1 billion in November, government statistics show. In the same month last year, they were worth $1.85 billion.

The state government itself, in a budget review mid-financial year, projected a near $650 million decline in stamp duty revenue.

Property hotspots in 2018 as market conditions tipped to weaken

  Property hotspots in 2018 as market conditions tipped to weaken Why Hobart could be the next boom town.Tim Lawless, head of research at property data firm CoreLogic, believes that while the market will "gradually lose steam", it will still be active as the forces of demand and supply are still in play.

forecast for our property values in 2018 : The Sydney property '8 Property Market Trends for 2018 “Our Sydney forecast for 2018 is for a four per cent to eight per cent increase in prices whereby Sydney will record a soft market in the first half of the year

SYDNEY and Melbourne house prices have been tipped to fall by 5 to 10 per cent this year as Australia’s property cycle enters a downward phase. CoreLogic data released on Tuesday showed national dwelling values fell 0.3 per cent in December

On the slide: Sydney is leading the country's property downturn, with prices falling 0.9 per cent in December 2017.© Michel Bunn On the slide: Sydney is leading the country's property downturn, with prices falling 0.9 per cent in December 2017. But Ms Seve said the effect of a falling property market on the state's bottom line could be much greater.

"It will also affect future projections of land tax revenue in NSW [which are based on a three-year average]," she said.

Land tax is worth about $3 billion to the state and stamp duty nearly three times as much as Sydney's property market grows.

But the state government, which is fond of boasting of its $5-billion plus surplus, denied such a downturn was likely to affect the state's budget position.

"Thanks to our government's fiscal discipline, our strong financial position and our diversified economy, NSW is well positioned to deal with changes in market conditions," Finance Minister Victor Dominello said.

"Residential stamp duty revenues make up only 9 per cent of total revenues, with 91 per cent of revenue coming from other sources such as GST payments, Commonwealth grants and payroll tax."

Acting Opposition Leader Michael Daley accused the government of being dependent on Sydney's property market.

2018: the year getting a mortgage will become harder

  2018: the year getting a mortgage will become harder How far will house prices fall in 2018?The first is, what is the increasing difficulty buyers will have in securing a loan for residential property?  The other is, will there be growing pressure to pay down the mortgage while interest rates are still low?

“Dwelling prices in Sydney have fallen for eight consecutive months, and are down 4.3 per cent from their peak in mid-2017,” he says. “Our base case for property prices has them down by 3-6 per cent per annum in Sydney and Melbourne by end 2018 ,” says Aird.

Sydney property prices are tipped to pull back by up to 10 per cent over the next 12 to 18 months, experts warn, after real estate markets ended the year with a whimper.

"Any significant downturn could be put the budget and public services at risk," he said.

"We have yet to hear of the government's plan B because it doesn't have one. "

With household debt at record highs, Mr Lawless expected to see regulators and policymakers encouraging home owners to reduce debt levels while interest rates were low, and warned that future borrowers, particularly investors, "may find securing a mortgage won't get any easier in 2018".

Relatively affordable regions, such as the Central Coast and the south-western suburbs of Sydney were better placed than the inner suburbs to hold their value due to interest from first-home buyers, he said.

"While the headline figures are set to weaken, below the surface the individual cities and regions of Australia will continue to operate under their own distinct cycles which are subject to more localised forces of demand and supply," Mr Lawless said.

High migration was likely to remain a key driver of housing demand.

Low interest rates and support for first-home buyers "are providing some support and should help ensure only moderate price falls," AMP Capital chief economist Shane Oliver said in a research note describing a crash as "unlikely".

He predicted Sydney prices would fall by about 5 per cent over 2018.

BIS Oxford Economics senior manager residential Angie Zigomanis expected prices could fall as much as 10 per cent in Sydney over the next two years in a "worst-case scenario" though said a 3 per cent decline over 2018 was more likely.

This was largely thanks to the restrictions placed on investors by the Australian Prudential Regulation Authority, putting a "handbrake" on these buyers.

"Investors are a big contributor to price growth in Sydney and this will stop them from paying the premiums they have in the past," he said.

The annual number of sales can drop by up to a quarter from peak to trough in a property cycle.

Australia shares seen edging up as oil prices firm; NZ up .
Australian shares are expected to recover from two straight sessions of falls on Friday, latching on to solid leads from Wall Street inspired by higher oil prices. Wall Street surged to record highs on Thursday on the back of rising oil prices and as investors bet on a strong U.S. corporate earnings season. Oil settled at three-year highs on signs that global inventories were tightening. [.N] [O/R]The local share price index futures (YAPcm1) rose 0.3 percent or 17 points to 6,030, a 37.6-point discount to the underlying S&P/ASX 200 index (.AXJO) close. The benchmark fell 0.5 percent on Thursday.

—   Share news in the SOC. Networks

Topical videos:

This is interesting!