What do the next 12 months hold?
LJ Hooker has outlined five major themes which will be influential in the property market in 2017.
1. Rise of the renter
There has been a culmination of factors over the last two years which have made some households prefer to rent than buy.
Affordability – Some households look at recent price growth, weigh up renting as opposed to a mortgage and feel more comfortable with a lease.
Investor demand – Record low interest rates have encouraged investors into the market, allowing many new apartment and attached dwelling projects to proceed. This investor interest will likely see rental growth remain modest in the coming years, which improves security for tenants.
New supply – The regeneration of suburbs close to the city has created more lifestyle opportunities for renters who want to live closer to work, cafes and shopping.
2. The sharing economy
Disruptive and innovative technologies like Uber are changing our way of life, particularly how we ‘monetise’ our activities and assets.
Looking forward, these technologies are also going to influence how we build homes. For instance, building a granny flat or bedroom with a private entrance for short or long-term tenants.
The sharing economy is also changing the way developers and strata managers operate, providing shared car services to reduce the need for private and on-street parking in new complexes.
3. The cost of change
The cost of moving has become a real issue for some people. For downsizers and upgraders the additional government costs associated with buying or selling a home has forced many to remain in, or renovate, their current home.
As the shortage of listings in many cities and towns has shown, many would-be sellers are deciding to stay put rather than move.
When people stay at home for extended periods, it has a flow-on effect: it reduces the amount of stock and choice in the marketplace, invariably placing pressure on prices as buyers compete keenly.
4. Picking apartment pockets
There are a small number of areas which have had an influx of apartments in recent years and some areas are planned to be rejuvenated through new projects starting or coming on line in 2017.
While apartment projects have been in the glare of media and property commentators in 2016, it’s good to remind ourselves that capital cities and towns are primarily made up of detached houses. Developers are simply meeting the needs of a market demographic. Nonetheless, if you’re looking to make an apartment purchase in 2017, do your research on supply versus demand and ‘pick your pocket’.
5. Love thy neighbour
The rapid expansion of our cities has amplified the need for more dwellings and led to the densification of suburbs around Australia. This has seen councils rezone residential, commercial, industrial and rural land to allow higher density development. The rezoning of land has created the opportunity for neighbours to team-up, amalgamate their properties and offer them for sale in one line.