Domain’s Property Price Forecast predicts stability of the housing market

According to research from the University of Michigan, falling property prices will stabilize over the next year before transitioning into moderate growth. Domain GroupIt was already predicted.

Domain’s first Property Price Forecast models, up to 2020, the median house- and unit-price in capital cities.

Domain Group economist Trent Wiltshire stated that strong population growth and low unemployment are the main drivers of property price increases for the period to 2020.

Wiltshire stated, “We believe that the market will recover itself by 2019 and then switch gears towards a cycle of modest growth throughout 2020.”

Domain predicts that unit price will be more resilient thanks to the stamp duties concessions in Sydney and Melbourne.

Nationally, unit prices will rise by 2 percent in 2019 compared to 3 percent in 2020. They will drop to 2016 levels by the second half of next year.

Domain’s forecasts are based on Domain’s prediction of the most likely outcome in the next two years.

It warns, however, that investors could force sells and higher mortgage rates than they anticipated, slower population growth, or slowing of the pace of change in the future.

Labor’s proposed changes to negative-gearing could have a significant long-term impact on house prices, but it may also give an immediate boost.

Mr Wiltshire stated that he believed there were still bargains for those looking to purchase.

Sydney house prices currently stand at 8 percent below peak. This will remain true until December 2019, at which point they will likely continue to decline with only modest growth in 2020.

Mr Wilshire stated, “House prices in Sydney will remain stable in 2019 and grow by around 4 percent in 2020.”

Mid-2019 should see a drop in median house prices to just over $1million. This is 12 percent less than it was in June 2017, when it was $1.2million.

Mr Wiltshire stated, “Based on our forecast, the price drop for Sydney and Melbourne would be the greatest since the late 1980s.”

Over 1100 properties have not been sold at auction in Sydney over the past four weekends.

According to Mr Wiltshire the combination of low supply with few buyers results in lower prices.

He said that prices for apartments would continue falling by three percent annually, but that they are expected to rise by the same amount next years, and then five per cent in 2020.

There are some good news for home-owners after a difficult twelve-month in Melbourne’s property markets.

Domain research predicts that house prices will drop another 1% next year, following a fall in house prices of nine percent this year. It projects a fourth percent increase in 2020.

Mr Wiltshire stated, “That’s probably driven things such as the royal commission and tighter banking lending standards going into 2019.”

Domain’s report predicts that $800,000.00 will be the lowest point in the house market. Domain’s report predicts that the house market will drop to $800,000. This is comparable with late 2016.

Unit prices will rise by approximately one percent in 2019/2020 after a drop up to two percentage point this year.

Domain predicts that Brisbane’s median home price will rise by four percent in 2019 and five percent in 2010. This is due to slower construction and strong growth. This is after a flat-year.

This rise places Brisbane at the top of Australia’s fastest-growing markets.

Mr Wiltshire explained Brisbane will experience the highest price growth in the coming years.

“It’s easy to see why people are moving to Queensland from New South Wales to Victoria because there is more affordable housing.”

The Brisbane unit prices have fallen six percent this year. They are expected to rise in the coming years.

“We see a bit of a turnaround in 2019, after a few years of price drops. We predict that unit prices will rise by around three percent in Brisbane over the next two-years,” Mr Wiltshire stated.

Some areas of Queensland are already experiencing growth.

Caboolture prices have increased by nearly 10% over the past 12 months, while unit prices have risen by 17.5 percent.

In the next two years, Adelaide’s house prices will continue to rise.

The Domain property report shows South Australia performing better than other states in this year’s domain property survey.

Mr Wiltshire explained, “House price and unit price growth will remain approximately two percent in 2019-2020. This slow but steady growth is a continuation from what’s happened in Adelaide over several years.”

Domain is cautious about Adelaide’s population growth and employment growth.

SA is home for fewer property investors. Owner-occupied homebuyers get two thirds (or even more) of all new loan approvals.

The price of units fell by 1% in 2018, but is expected back to normal with a rise up of two percent in 2019-20.

Domain expects Perth house prices in 2019 to grow faster than in any other market following recent declines.

After falling 13% from their peak of $616,000 in 2014, prices are expected to stabilize by early 2019. This includes a five per cent fall.

Domain predicts that prices will rise by five percent in 2019, and another three percent in 2020.

Expected drop in 2018 of 6 percent, before rising by 2 percent each year in 2019 & 2020.

Domain pointed out that prices have fallen in recent years after the end of the mining boom, and that the incoming economic growth was due to better economic conditions, such as higher commodity prices and population growth.

With 12%, the capital of Tasmania is poised for the nation’s fastest growth in 2018.

Domain projects that house prices will increase by 2% in 2016, despite the fact they are 40% more than at the beginning 2016.

Hobart’s unit prices are expected to remain stable in 2019, with modest growth in 2020.

Research shows that the capital of the country’s house prices will rise by about two percent in 2018 and four percent annually for the next two.

Domain’s forecast for price appreciation is supported in part by low unemployment and strong growth of the population.

Domain forecasts Canberra to experience slower growth than houses, but the outlook is less clear for unit prices.