It’s been quite a year for the Australian property market – with buyers out in record numbers, investors getting in on the action, prices continuing to gain momentum and record auction clearance rates contributing to a market recovery following a sluggish 2011.
With all those elements in play, perhaps it’s not surprising that property experts are predicting more activity and price growth next year, to be driven once again by the Sydney property market.
Stage set for further growth
Property investment expert Michael Yardney, CEO of Metropole Property Strategists, believes the market is currently in a cyclical upturn that will continue into 2014 and 2015, as low interest rates and rising consumer confidence encourage more people to enter the property market.
“There are always some surprises – an x-factor that comes out of the blue that you can’t predict, and this can be due to international or local factors – but in saying that, I believe 2014 will be a good year for property,” Yardney said.
In addition to low interest rates and an improving economy, Yardney cited population growth as a factor that will contribute to a strong property market.
“Australia’s population is growing at 1.8 percent per annum and it doesn’t look like it’s going to slow down. That suggests that our population will increase by 10 percent in the next five years and the vast majority of those people are going to be coming to the major cities, which will underpin property values.”
Real Estate Institute of Australia president Peter Bushby agreed that the property market is set for further growth in 2014. “Interest rates are expected to stay relatively low, continuing to assist the housing market. Now that we’ve moved on from the distraction of the federal election, public and business sentiment are generally more positive,” he said.
“We can expect continued steady improvement in market activity in most markets and generally a more positive year ahead, provided there are no left field global issues that emerge. We would like to see initiatives re-instated or new programs to assist first home buyers get into their own properties.”
Sydney to drive growth
Property research company SQM Research’s 2014 market outlook, released this month, is predicting a bumper year for Sydney with price growth expectations between 15 percent and 20 percent. According to Australian Property Monitors, Sydney is already the most expensive city in Australia with 66 percent of suburbs boasting a media price in excess of $1 million.
Nationally, SQM is forecasting house price rises between 7 percent and 11 percent in capital cities, an increase from the expected 2013 average of 6 percent to 9 percent. Following Sydney, Melbourne and Brisbane will post the next biggest price growths, according to SQM, of between 4 percent and 8 percent each.
Metropole’s Yardney is predicting national price growth in the vicinity of 7 percent, also tipping Sydney to post double-digit growth. “Sydney will be an outstanding performer,” he said. “Brisbane is starting to pick up so it will do better next year than this year. All the capital cities will do reasonable well, with the exception of Hobart and Darwin.”