Angus Raine, Executive Chairman of Raine & Horne takes a rear vision mirror look at how the residential property market has fared around Australia in 2017.
The headline story of 2017 is Sydney, where the median home price is now $905,917. Values in the emerald city have risen 75% since 2012 though we saw values cool by -0.5% in October, bringing capital gains over the past 12 months down to 7.7%. It’s good news for first home buyers, but double-digit price falls are unlikely. Sydney’s population is expected to grow from 5 million to 8 million people by 2050, underpinning demand for more homes well into the future.
Melbourne is nipping at Sydney’s heels with home values climbing 11.0% over the past 12 months, taking the median value to $710,420. Record-breaking migration is supporting the market but with values rising by just 1.9% in the October quarter, the slowest pace since mid-2016, Melbourne seems poised for a breather.
Brisbane values have climbed just 2.7% over the past 12 months (median property price: $490,525). However, the affordability gap between Brisbane and Sydney is fueling interstate migration, and with the Commonwealth Games likely to ignite the local market, Brisbane is a real growth prospect for 2018.
The Perth market currently offers exceptional opportunities. The median home value of $462,624 is vastly more affordable than the eastern state capitals, and though values have dropped 2.6% in the past 12 months, the market is now stabilising. Perth is superbly placed as a gateway for migration from Asia, and this should underpin property values as we look ahead.
Adelaide continues to enjoy steady gains, with values having risen 4.6% over the past year to a median of $430,303. There’s a lot to love about Adelaide, and better affordability helps the city avoid the cyclical swings we see elsewhere.
Hobart has been the surprise packet of 2017. Values having climbed 12.7% over the last 12 months taking the median value to $396,393. Much of this has been driven by the affordability of Tasmania, and more moderate price growth is likely across 2018.
2017 has a been a transitional year for Darwin real estate, with median values resting at $438,000, which many buyers have identified as the bottom of the market. Consequently, sales activity is more than double that of November 2016, with cashed-upped first-timers leading the charge. Moreover, the ongoing deployment of US troops to Darwin will help to realign the local market in 2018, while the NT government is ramping up infrastructure investment. In combination, these factors will underpin values long-term.
I encourage you to speak to your local Raine & Horne property expert to understand how values may move in your patch of Australia throughout the New Year.