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Sydney House Prices to Drop in 2016
Slowdown already underway
Compared to the 12.8% growth registered in 2014, Sydney’s growth is expected to mellow down to 7.7% this year, and to 3.4% in 2016. For comparison, Melbourne’s the growth was 5.4% in 2014, 6.6% this year and is expected to come down to 3.5% in the year 2016.
The NAB panel
The NAB panel which came up with this residential property survey is made up of professionals from various fields, including but not limited to, developers, valuers, fund managers, and property operators.
You can read the original article here.
There are so many different opinions on the anticipated growth of Sydney real estate. There are those who feel the NSW capital city will actually even have to work real hard to register that predicted 3.4% growth in 2016. Then there are those who feel the growth might still be so electric that the RBA may need to step in at some stage and bring in micro-prudential measures.
Sticking close to fundamentals of economy
I think the market is sticking close to its intrinsic values and until the day low interest rates do not add to inflationary pressure, the lack of GDP growth won’t hurt. The household leverage being as high as it is, and expenses, debt and inflation-adjusted income making a reasonable troika, there is no point forecasting an economic storm that will take a serious toll on Sydney house prices.
The fundamentals of economy are not against it and it has gotten a second wind after minor corrections in prices. All this may mean that the Harbour City will beat naysayers and run along its merry course, reaching new median values (in case you missed out, it has shot past $900,000 in median house values for the March quarter).
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