Market Update

Stock remains low - gain access to the huge number of off-market properties where opportunities do exist

Property Market May Finally Cramp in 2016

property troughPhil McCarroll writes an article for the website Your Investment Property wherein he argues about the next year being a slow one for the property market. After the year 2012, Australia’s housing market may grow to its feeblest, says McCarroll. We may witness something to the tune of 3-8% growth in 2016.

Slowdown in economy anticipated

In the year leading to June 2015, the growth recorded was 9.8%. The scene will be different now. Much of the slowdown will centre on the relatively poor performance of the Sydney property market. The nation’s economy on the whole is coming off the boil. Add to it the changes in lending practices introduced by the APRA.

Melbourne to dominate Sydney for a change

Together, these two factors will contribute to the new property trend. Sydney’s dominance over Melbourne when it comes to the present property cycle will end in 2016. Where Sydney is anticipated to put in 4-9% of value growth, Melbourne may register a robust 8-13% growth.

Other capital cities in the reckoning

Hobart, Canberra and Adelaide have been lying low for long and while there will be betterment in their fortunes, it will be nothing to write home about. Brisbane, a city with a lot of potential may finally come out of the shadows in 2016 and put up something like 5-8% in terms of price rise, argues McCarroll.

Rental yields

Lower pressure of inflation has brought down rental yields and in the present environment it may be a matter of time before rental rates stoop incredibly low. We cannot rule out an environment of 0-3% rental yield in the capital cities across the country in 2016. Gold Coast, Hobart and Melbourne (not unexpected) are likely to buck the trend and report high rental increases.

You can read the original article here.

Household debt/income ratio makes for shocking reading

The housing market debt makes for quite a staggering number presently and weighed against the income, it might be all the shock our nation’s economy requires. If the threat of global deflation materialises, we may be in for some rough sailing. Naturally, when the macro-economy becomes affected, the housing sector will not be spared the pinch.