Property Predictions - 2018

What are you predications for 2018, throw your hat in the ring

This is what some of the experts think

Australian property prices forecast to fall then stagnate: Moody's

Housing market has peaked, says giant investment bank

MTR

 

I originally sent this out to my database about a month ago, but coincidentally just posted it to my website today....

Paul Liddy Auctioneer Brisbane Real Estate Market Comment paulliddy

 

So what will be the drive for this market????

 

It's being driven by the hype thread! Another 120 pages or so and it will take off!

 

stagnant, due to tighten lending criteria which is a good thing in my books, but also consumer confidence is gone which is not so good. now everyone is in the wait and see mode.

 

Market 1: BRISBANE .Brisbane, semi prestige market within 5km of the CBD, 405sqm lots with new builds 1.1m plus will continue to grow and likely prove to be profitable for investors who bought sites 2-3 years ago in those areas. I don't see that PPOR market sliding or stagnating and envisage more growth.

Also see free standing homes on 600sqm+ lots within 5km of the CBD continue to rise in value, albeit likely at a modest and steady rate.

Market 2. SYDNEY. The 2 bedroom Unit markets (in smaller complexes, low strata) in Sydney; Bondi, Bondi Beach, Coogee, Rosebay and surrounds. I see them continuing to rise in sale price and I don't see any major slowdown yet. The demand is so high for older 2 bedder units with a lock up garage that they are all getting snapped up at mostly post 1mil prices, and that's for unrenovated. Renovated will go north of 1.2m.

Also new, modern duplex or free standing homes built in the Eastern Suburbs targeted at wealthy PPOR buyers are fetching 3.5-4.5m and I expect the price to hold or increase in 2018. Demand far outstrips supply atm and the land in these areas is extremely limited. You literally need to wait for an old family member to die to buy the site to develop or house to renovate. Sometimes homes wont come up on the market for decades.


Also the ship has largely (not completely) already sailed in both these markets, so unlikely to make good short term investments if bought now.

My take on things.

 

Right, did you contribute to the hype If you did, good for you

 

The ship has a very long way to go in Brisbane. In Sydney, it's easily crossed the pacifitocen...barely left the harbour in Brisbane for ALL asset types.
****, we still celebrate the ekka and throw a public holiday here...nope..ship has not moved.

(hype but true) :
It's not too late...there will be Mexico style FOMO in Brisbane, but we are a ways off that happening - thus, buy NOW (in Brisbane and Brisbane only) to not find yourselves in the upcoming FOMO distress.

 

I can only provide some insight for Darwin...

Flat-lining throughout the year. Maybe another small dip as Inpex finally finishes construction.

I think the big nasty drops are gone though. It's pretty clear what price the Market will pay for properties. You either meet it or don't sell. The choice is binary.

The Northern Suburbs will continue to be the safer bet, with the 820 postcode commanding a premium due to being on the peninsular and close to the CBD. 810 will be fine too with Old Elevated houses starting to see some growth soon as they simply become rarer and rare as time goes on. Everyone wants to live in an old elevated house up here due to the climate.

I doubt Palmerston will grow much due to too much land and they keep building houses that wouldn't look out of place in Melbourne. The houses are lovely but are the wrong tools for the job up here. It is also looking like the new suburb of Zuccoli will become a problem down the line (low socio-economic). I hope not, but that is my gut feeling. Driving around and seeing the lack of care around the place (only 2 years in) does not bode well.

The CBD is still a no go zone and will be for the next 5 years easy. If you hear of someone thinking about a Darwin CBD apartment, please get a wet fish and slap them silly.

Locals will continue to buy as the high yields mean it is cheaper to buy than rent.

If the national economy implodes...I suspect that it will actually be a good thing for Darwin as more people will move here for work. They still can't get enough people here to do all the jobs. The pay remains good and the housing affordable.

If not...well it'll just bounce along the bottom for another year (just don't buy a CBD apartment!!!)

 

Agree, I was more referring to splitter blocks, though not articulated that clearly. I think inner to middle rings over the next 5 years have an excellent chance for decent growth, especially free standing homes on larger blocks. Btw Sydneysiders have no FOMO, those who didn't buy KNOW they missed the boat this poker round. They were beat by the mahjong bandits.

 

I will share some insight on Perth, and plenty of threads on PC about this.

In one word....Price Sensitive.

Properties are selling but it will come back to price point.

RE agents are telling me that the market has bottomed out, but time will tell.

 

I'm hoping I won't have miss the boat too much by purchasing sometime late next year or early 2019...

 

Mate splitter blocks EVERYWHERE have gone insane in Brissy (Brisbane insane, not Sydney) in Brisbane. I have been picking them up pretty frantically since 2012 and have watched prices for these increase by 30-50% or even more in some cases. It's unfortunately got to the point where if you don't know what you are doing, you are likely to overpay significantly and make very little in terms of return, if any at all.

I've already seen two examples of this in the areas I work in. One where an "industry professional" overpaid for the block, then overpaid for the builds, made huge fundamental design errors (such as installing no air-conditioning at all), then had them sitting on the market WAY overpriced (by probably 75-100k), with zero interest. Now they have had to rent both and based on the advertised rents they'd be copping a huge monthly spanking to their bank balance, at the same time likely having made a net loss on the development.

The second, directly across the road from a site I picked up, someone paid 75k more than I did for essentially the same stock (no differing features/elevations etc just flat land, in fact probably could argue my side of street is nicer). The agent convinced them they could sell blocks for somewhere around 30k each more than they are worth, so now when they sell for a realistic price, its likely after all costs and commissions very little will be made.

Rising markets are great, but geez you really need to know what you are doing if you go down the (even really simple splitter) development path.

 

That is precisely what I was saying in another thread and I was called a spruiker lol. Glad someone else on the ground and knows their stuff is saying it.

Don't understand how anyone can build them and leave out aircon...

The splitter deals I am looking at now (sites) just don't stack up for the area unless there is a view or some special aspect, generally within the 4km mark and asking over 1mil...

What price point are you looking at mate.

Cheers

 

120 pages will be gotten in a week, the way its going. By the way, there is no hype thread- considering its all true

 

WillB
This is no different to buying any development site in any State, I make a point of using a Town planner when sourcing sites in Melb, cos I don't have the expertise to work out exactly what I can do with the site. It can be very complex especially when you have significant vegetation overlay, then you should also employ an arborist.

If using a BA be very wary, most are not developers? guess work wont cut it

 

I doubt it. When Perth moves, it doesn't move fast at the start, in my experience.

 

Funny you should say that MTR, in fact the first case in my post above is a BA

 

Hope so, I know very, very little about Perth. All I know is they are obsessed with brick....

 

I actually have used BA (once for a site) and also a town planner to help me source sites and very happy with both. I think people run into trouble when they don't know how to verify the deals brought to them.