Capital city detached housing values tipped to increase 5.6 percent: Moody's
Detached housing values across the capital cities is forecast to increase 5.6 percent in 2017 according to the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast, 2017Q1.
According to the forecast, detached housing values are tipped to increase around 7.2 percent in 2017 following a 10.9 percent gain in 2016.
The report said Apartment values are forecast to grow 7.5 percent, after a 10 percent increase in 2016.
"Slower growth in apartment values in Melbourne relative to detached houses suggests buyers are already pricing in expected supply," the report said.
"Detached housing values in Melbourne are forecast to grow 7 percent in 2017 after an 11.3 percent increase in 2016, and apartment values are forecast to grow 3.4 percent, after a 4.6 percent increase in 2016.
"Home values in Melbourne remain buoyant; prices rose 12.8 percent from January 2016 to January 2017.
"However, unit prices rose 2.8 percent during the same period.
This situation suggests that the coming supply of apartments has already dampened value growth.
"Apartment values will rise 3.4 percent in 2017, and a period of stagnation will follow through to 2020. Detached-home values are expected to rise 7 percent in 2017, followed by a steady decline through to 2020.
"After a strong showing in 2016, Brisbane’s property market will cool in 2017 and 2018. The mining slowdown continues to weigh on job growth, and unemployment in the city’s local economy is expected to remain elevated at around 6 percent in 2017.
"Apartment values are set to slow more sharply than detached-home values.
"The slight divergence stems from the prominent increase in incoming housing supply. Historically, for each apartment approved, 1.96 houses were approved. However, since 2012, the trend has reversed sharply, and there were 1.3 units approved for each house.
"Consequently, detached-home values will likely rise 3.3 percent in 2017 and a further 1.2 percent in 2018.
"The oncoming supply from 2016 will cause apartment prices to remain at in 2017. The Brisbane property market will likely recover from 2018 onwards, supported by population growth."
"For Sydney, the strengthening local economy has been the key driver of real estate demand.
"The labor market is approaching full employment, with a jobless rate of 4.7 at the end of 2016. Furthermore, rents have stabilised after a drop in the rst half of 2016; Sydney’s rental prices grew 1 percent over the month in January. Overall, detached-home and apartment prices in the city are expected to increase 7.2 percent and 7.5 percent in 2017 respectively."
