Over the last week, the media has been saturated with forecasts from industry commentators as they try to predict the future of property markets across the country. Here’s what they are saying.
UBS analysts believe recent commentary from the Australian Prudential Regulation Authority (APRA) coupled with the Banking Royal Commission’s focus on responsible lending could trigger a fresh round of regulatory measures, this time focused on loan serviceability, which would impact property prices.
Moody’s Analytics has forecast a 4.2 per cent fall in detached housing in Sydney by the end of 2018, followed by a small rebound of 0.9 per cent in 2019. In the same report, Moody’s said apartment values in Sydney would remain flat over the next two years for the most part.
Our former Federal Treasurer, Peter Costello even weighed into the debate, saying we would see falling property prices. His argument is that Australia’s heavily indebted economy has become too vulnerable to rising global interest rates.
However, SQM Research believes a rise in house prices in 2018 is still possible. Despite the likelihood of an interest rate hike in 2019, SQM said it doesn’t think a property crash is imminent and has held onto its forecast of 4-8 per cent growth in Sydney and 7-12 per cent growth in Melbourne for 2018.
When it comes to predicting the future of real estate, there are many differing points of view. As we move through 2018, we will gain a clearer understanding of where markets are heading.