Property Forecast 2020
House prices across all capital cities are expected to stabilize in 2020.
According to the QBE Australian Housing Outlook 2019- 2022, house prices across all capital cities are expected to stabilize in 2020, before strong population growth and a sharp downturn in new dwelling completions result in median prices increasing. The future looks a lot brighter for our capital cities and the worst appears to have passed for the Perth property market.
First homebuyers, accounting for almost 20% of mortgage lending, are continuing to lead the charge to buy residential property as other conditions, including increased FIRB stamp duty, forced many potential investors out. More than 110,000 first home buyers entered the Australian housing market in 2019. It is expected that a similar number of first homebuyers will be getting the keys to their very own property in 2020 especially with the all time low interest rates.
Perth property prices are predicted to rebound in 2020 according to Domain’s property price forecast. However, given the entrenched weakness in the Perth market, they forecast only modest price growth of zero to 2% for houses and units. A number of fundamental drivers of prices suggest this turnaround for Perth. Annual population growth is predicted to increase to 1.5 per cent in 2020 (from 0.9 per cent in 2018), interest rates are lower, the Australian dollar has fallen, the mining outlook is now much stronger, there is growing demand for workers and unemployment is expected to fall.
Let’s not forget about our friends in the regional locations. Whilst there has been a resurgence in some capital cities where property markets over recent month’s show no signs of slowing down, the real hot spots to watch aren’t Sydney or Melbourne. According to founder of Hotspotting.com.au, Terry Ryder, the Sunshine Coast is Australia’s "most compelling growth story” when it comes to property.
Having recently taken an in-depth look at the state of the region while compiling a major report for SunCentral, Mr Ryder says the Sunshine Coast has “gone from being arguably a tourist town to being recognised by the Global Intelligent Community Forum as an international city of renown in the space of about three years. Of course, there were many events happening behind the scenes for a long time to bring that to fruition, but this image has only just been projected outwardly in the past two to three years,” he says.
"The new hospital precinct, the CBD, which is a unique event in itself as there is no other place where a greenfield site has allowed the creation of a new CBD from the ground up, and the airport expansion, future international broadband subsea cable and billions of dollars in highway upgrade projects has seen more than $20 billion of investment when you add it all up. That is not only remarkably high, but it means our infrastructure spending is way ahead of the capital cities of Hobart, Canberra and Darwin."
In summary, it seems that green shoots of recovery seem to be emerging for the Perth market whilst the Sunshine Coast market is flourishing. The Perth housing market is currently offering the best value out of all the capital cities and some of the best prospects.
The key to that potential is in the rental market, ideal for investors to buy and lease now! Rents in Perth peaked with the market in 2013/14 and since stabilized and have posted some modest gains in recent times largely on the back of an improvement in vacancy rates. Current vacancy rate is recorded at 2.4%, consistent with rising rents and rising prices. Looking to buy or invest? Checkout our range of properties for sale here.
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