2017 property market wrap up
Nationally it was a year of two halves
For the majority of the country, WA and NT aside, the start of 2017 had market indicators pointing squarely in favour of sellers. Listings were very tight and competition, for the limited amount of properties on the market, was strong.
This resulted in auction clearance rates of around 80 per cent in Sydney and Melbourne and strong price growth across most capital city markets.
However, the second half of the year heralded a distinct property market shift. Despite an ongoing positive economic environment - low interest rates, declining unemployment and strong population growth – investor demand moderated due to tighter lending restrictions and listings rose considerably in the lead up to the traditional spring selling season.
Each capital city had its own story in 2017
Sydney experienced strong price growth for the first half of the year, driven by a distinct lack of listings and strong competition between all buyer types. This saw auction clearance rates rise to sit comfortably between 75 per cent and 80 per cent. However, momentum swung towards the end of the year as listings rose for spring and investor demand moderated. Looking forward, the economic fundamentals of NSW remain very positive leading in to the new year, however, affordability and the level of investor demand will weigh on price growth in 2018.
Auction numbers were exceptionally high over the course of 2017 as owners looked to capitalise on the elevated level of competition between buyers. Price growth remained solid right through the year, however, it began to slowdown in the last quarter as listings rose, new supply comes onto the market and investor demand moderates. Victoria has experienced very strong population growth over the past 12 months and when combined with a positive economic situation should see a positive and active property market over the year ahead.
An expectation of a large amount of new apartment supply weighed on market sentiment at the start of the year, however, this had a limited impact on a handful of inner city suburbs. The broader housing market has experienced steady price growth and positive buyer demand from upgraders, interstate buyers and investors. Affordability, compared to Sydney and Melbourne, continues to be a key driver of the Brisbane housing market and should remain a positive driver into 2018. The conclusion of the state election and the Commonwealth Games on the Gold Coast should all be positive drivers for the market next year.
The ongoing soft economic environment saw price declines continue over the first half of the year, as listings increased and buyer demand remained soft. Market conditions began to shift over the second half of the year, the number of new listings coming onto the market slowed and buyers began to emerge. Investors, in particular, have begun to seek out “bottom of the market” opportunities looking to pick up a high yielding bargain. This momentum shift should continue into the new year as the state’s economic conditions slowly improve.
Adelaide experienced a very steady market over 2017. Buyer demand remained in place for most markets across the city and investors continue to be attracted to the higher yields and affordability compared to other capitals. In addition, the conclusion of the state election, at the beginning of the year, provided an uplift in confidence for the economy and property markets across the state. Listings lifted in spring which had a slight dampening on price growth, however, the market should remain steady over 2018.
Property markets across the ACT performed well over the course of 2017. A pickup in employment growth and a very low number of properties on the market for sale combined to see strong price growth over the year. While listings have since increased they remain at a level that should support price growth over summer and into the new year.
Hobart has been the best performing capital city over the course of 2017. Higher interest from interstate investors, upsizers and downsizers, looking for affordable housing options, combined with a very low number of properties on the market for sale drove the strong market performance. Affordability and a slowly improving economy should see this strength, although not the same level, continue over the coming 12 months.
Property markets have struggled across the NT, over the past 18 months, due to the soft performance of the local economy. Jobs and population growth stagnated, off the back of the wind down of mining and resource investment across the territory, dampening property markets over the past year. Markets should begin to plateau over the coming year as these effects move through their cycles.