Doomsayers have it all wrong — there is no housing bubble across Australia and a market crash is highly unlikely This is according to statistics by the CoreLogic-Moody’s Analytics Australian Forecast Home Value Index which indicated slow and steady home values growth over the next two years.
International economists stirred up a storm when they claimed that Australia would be the next nation to experience a housing crisis. Talk of a housing bubble has been prevalent over the past few months, especially in some capital cities like Sydney and Melbourne.
But local analysts have dismissed that notion and said that the growth will continue albeit at a slower pace. This is most probably because of stricter investor lending requirements, a surge in owner-occupier loans, and other factors like slower income growth.
Alastair Chan, an economist at Moody’s Analytics said, “On the outlook for the housing market nationally, we expect house price appreciation to slow in 2016. Our forecast reflects lower income growth as the Australian economy transitions away from mining-related investment, as well as the strong build-up of housing supply over the past two years.”
According to Tim Lawless, research director at CoreLogic, Melbourne will continue to outperform Sydney this year. He also suggested that the chance of either two markets crashing is unlikely. “We’re not about to see either of those markets falling off a cliff. It’s actually quite a controlled movement, it’s probably just what the doctor ordered when it comes to making an improvement in the stability of our housing markets,” he said.
Other markets such as Canberra and Brisbane may see moderate levels of growth. Brisbane in particular should outperform the rest of the country with its stable rental growth and employment conditions.
Know Where to Invest
A good understanding of how the market moves is integral in any property investment plan. If you’re looking where to invest next, you need to consider a variety of factors which should include potential capital growth and future developments. Consider up-and-coming areas as well if you want to maximise the growth of your portfolio.
Using our 44-Point Property Checklist, for instance, you can find properties that can match your investment goals. If you want to know more about how to improve your property game with effective investment strategies, contact us today.