Reasons why regional areas have the potential for growth this year
Washington Brown of Sydney has given the reason why the property market is changing this year as compared to the last few years.
The report states that a lacklustre start to 2019 was largely due to apprehension around last year’s Federal Election and particularly proposed housing-related tax policies from the ALP. Au founder Terry Ryder.
“One year ago everything was super negative but now things are much more positive”, he states.
Let’s first look at why prices have started to rise again…
In the wake of the uncertainty in the property market over 2019 many sellers decided to hang onto their homes, fearing they wouldn’t get the desired price, and construction also eased. This led to a lack of available stock for buyers to choose from, which Ryder says was one of the several factors contributing to the price growth that started towards the end of the year and has continued into this year.
One of the factors in the escalation of prices, particularly in bigger cities, was that at a time when demand recovered quite strongly, there was very little supply and vacancies were generally low in most locations around Australia.
Ryder says, “There was a lot of competition for good properties available, which was a big factor in price growth last year”.
Now, in 2020, there are signs supply is starting to rise, with sellers more confident in testing the market, and more construction in the pipeline, so price inflation that occurred due to a lack of stock will likely be tempered moving forward.
Sydney’s listings are still 24. These events include an easing of lending restrictions, tax cuts, three interest rate reductions and more positive media coverage on the market. There are always multiple factors in why the market rises and these factors are all part of the equation, says Ryder.
But with more supply coming to the market this year, it will take some pressure off prices, particularly in Sydney and Melbourne. The market will settle down a bit and be what you might call a ‘normal’ market. Indeed, the latest CoreLogic Home Value Index found that while property prices rose across every capital city in January, the rate of growth had slowed in recent months. 1%, which is the fastest pace of growth for a 12-month period since December 2017, but in January the index was up by a total of 0.9 per cent
Growth markets are on the increase this year
Hobart has had a good run and is likely past its peak, and Darwin is still struggling, adds Ryder. He points out that regional areas also have the potential for growth this year, with the strongest market being regional Victoria, with parts of regional New South Wales also looking promising, including Orange, Wagga Wagga, Goulburn and Dalby. In regional Queensland, the Sunshine Coast offers some of the best growth potentials, with a strong economy, while some parts of Central Queensland are also recovering, including Mackay.
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