Turns out, there is no “Australian Property Market”—each state tends to do its own thing. As you can see in the charts from CoreLogic, each state and city has achieved different results over the last eight years. Unsurprisingly, the highest growth was in Sydney and Melbourne, mainly driven by employment opportunities.
Hobart’s recent and quick growth has been driven by tourism, which in turn has driven employment to service the tourism industries. Tourists have clearly fallen in love with the southern state and are taking advantage of the property opportunities, too.
Surprisingly though, Melbourne’s population is growing faster than Sydney’s, which may be contributing to Sydney’s slowing housing market. Housing affordability is driving people to actively move away from Sydney to Melbourne, so there are still good drivers for Melbourne’s property market to increase. People are also moving or investing in regional centres like Shoalhaven, Wollongong, and Greater Geelong as the median change in the annual value of houses and units has increased more than in previous years.
As for housing market predictions for next year, here are several from our end:
1. Sydney will continue to slow and stabilise as population growth slows but we will still see some growth in outlying New South Wales areas as people buy where they can afford and commute to work.
2. Victoria and Melbourne will continue to grow but we might begin to see Melbourne hitting its peak over the next two years. The outer suburbs and regional Victoria, like NSW, may see continued growth.
3. Queensland and Brisbane have good prospects for growth with many large infrastructure projects in the pipeline. Brisbane’s inner-city units continue to be an area to avoid with oversupply of stock.
4. South Australia and Adelaide have previously been predicted to grow however with the closure of Holden and the Whyalla steel works plus the state power issues, it will probably grow, albeit slower over the next year. If the state government cannot mitigate the issues facing South Australians, then the property market may come to a virtual standstill. 5. Northern Territory and Darwin are expected to recover in 2018 after several years of decline.
6. Tasmania and Hobart, in particular, have had a very good run and have been challenging Sydney and Melbourne for price growth. This is mainly due to a big increase in tourism, and is expected to continue through 2018. Hobart is certainly the property market to watch for growth.
7. ACT and Canberra may grow a little but with the impending federal elections in 2019, Canberra will possibly stabilise in preparation for a possible change of government in 18 months.
8. Western Australia and Perth will probably start to grow and increase again as it has been at the bottom of the property cycle for some time. Also, employment in the mining and related industries continues to grow so this may very well positively affect the housing market.
Images via CoreLogic