Will 2016 follow this year's property market? Valuers WBP breaks it down

Will 2016 follow this year's property market? Valuers WBP breaks it down
Will 2016 follow this year's property market? Valuers WBP breaks it down

Record-low interest rates, strong demand and record sales volumes kept the Australian property market going strong in 2015.

In 2016, supply will continue to support demand, but will demand hold up in the long-term? 

The WBP Property Group has analysed the market and are out with forecasts and trends. Here's a breakdown and analysis of the national market:

In Sydney, the market is showing signs of cooling. Declining auction clearance rates were to be expected, indicative of an overheated market. Prices have increased significantly in the past 12 months, seeing Sydney transition from a local buyer market to an investor-dominated market. 

In 2016, greater supply will hit the Sydney market, specifically off the plan and new developments. 

For investing, buyers would be wise to avoid Campelltown and the south western area of Sydney, which are considered high risk due to the large number of off the plan sales over the last 12 months to two years, says the group.

In Melbourne, indications are that established houses within 10 kilometres of the city and in the middle ring might be the strongest property class for growth in 2016. Demand for these freestanding houses has increased considerably through the second half of 2015, with little signs of abating. 

Perth is experiencing an oversupply of residential property, especially apartments. Rental values have softened. 

If economic conditions continue to weaken property values could retreat further in the short to medium term. 

Statistics show there is now over 16,000 properties for sale and nearly 9,000 properties for rent in the Perth metropolitan area, a clear indication of a softening and that property should priced realistically for clearance. 

Adelaide remains stable when compared to Melbourne and Sydney. There is limited supply in the prestige market, which is likely to drive heightened demand in 2016. 

Queensland will also see greater consistency in property prices as population rises, exporter confidence grows and the tourism dollar affects local trading. 

According to the group, fewer than 5% of properties on the market are specifically suited for long-term investment, and some trends that emerged from the data are: 

1. Auctions are king: most popular sales technique in inner-city areas

2. Record low rates: Australia’s low interest rates had a distinct flow on effect for vendors and buyers

3. For auctions, winter months performed better than years prior

4. Two bedroom, one bathroom, one car space most popular investment-grade property type

Tags: 
Property market Residential News

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