The housing boom is over, but the Queensland market continues to provide the potential for growth, according to a Chan & Naylor tax accountant in Redlands. National values have dropped for five consecutive months for the first time since March 2016, but the decline in February 2016 was more moderate, indicating that the decline may be slowing.
The total value of the national housing market is about $7.5 trillion with total mortgages of about $1.71 trillion. The loan to value ratio is around 23%, and that’s not so bad. Most capital cities have seen values decline recently, but the larger regional property markets have recorded faster growth in 2017, except for Western Australia. However, economic growth should always be the crucial factor when deciding where to invest.
Markets have turned, and naturally higher-end properties have suffered the most because these are largely dependent on discretionary spending. Eventually, more affordable markets may also suffer, but according to Chan & Naylor tax accountants in Redlands, median price properties are expected to hold their ground.
Sydney is taking a break after five years of growth, but with a strong economy with good jobs and population growth, the economic factors support continued price improvement, albeit slower. New migrants mainly settle in Sydney & Melbourne and will rent initially and eventually buy their own homes.
The Melbourne property market grew by 57% in the last five years and will likely be one of the best-performing markets this year. The Melbourne apartment market has performed well below the housing market, but is expected to improve because of the First Home Buyers Grant. Also, the predicted CBD apartment oversupply did not eventuate.
Meanwhile, Brisbane is expected to perform better this year. The housing market continues to outperform the unit market, but capital and rental growth in the Brisbane apartment market is expected soon. Well located houses in Brisbane’s inner and middle suburbs can be good investments because customer confidence and population growth underpin the expected capital growth. Queensland also recorded strong employment growth in 2017.
It isn’t too late to invest in property at this mature stage of the property cycle if you select the property carefully. The markets are fragmented, and not all properties will perform and grow. Also, note that rental growth turnaround will benefit property investors.
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