We are divulging into the data to try to guess the trends that might happen in regards to property in 2019. While no one has a crystal ball, and no one can predict the future with complete accuracy these are our bets. We will revisit the property predictions early 2020 and see where we were right. We will also call out where we were horribly wrong.
We are expecting Sydney to continue its downward trajectory. There is so much that can go wrong with harbourside city property. Potential negative gearing changes are likely to affect Sydney as we estimate this city properties to be the most negatively geared. Sydney is the least affordable city when it comes to property and this will continue a downward pressure on house prices in the area.
Unlike the most, we don’t expect The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to have significant impact on Sydney property prices. The Commission is likely to look into holistic, industry wide changes and would likely leave the borrowing regulations to APRA and RBA.
Uneducated Guess: Sydney property prices to be down on today
Similarly, to Sydney, Melbourne property prices are likely to be in red. I(n fact, as Melbourne usually lags behind Sydney we expect 2019 to be a much worse year for Melbourne property than for Sydney house prices. Affordability remains stretched which limits access to credit for those willing to buy in Melbourne, which likely to continue the downward pressure on Melbourne house prices.
Overall: Melbourne property prices to be down on today
Brisbane property has been unremarkable. Brisbane never had the property boom of its southern cousins, but like a hard-working bee, it just keeps quietly doing what it does best. Steady as she goes. We expect 2019 to be the turning year for Brisbane property. Towards end of 2019 and early 2020 a large number of multibillion-dollar projects are expected to hit Brisbane. A large pipeline of major expansion and infrastructure developments coupled with an improving economic outlook promises to create increasing employment, tourism and real estate opportunities. While these projects are expected to rump up only in 2020, we think 2019 will be the year that prepares Brisbane property for the long-awaited growth.
Uneducated Guess: Brisbane property prices to be moderately up
2019 is the year Adelaide property will shine! This city is investing significantly into forward looking, renewable and growth projects for the future. The city is adding thousands of jobs, with ongoing employment and significant defence contracts in pipeline we expect Adelaide to perform very well.
Uneducated Guess: Adelaide property prices to be up
2019 will be a very interesting year for Hobart. Not much to say, but we continue to be puzzled by the runaway growth in Hobart. Fundamentals don’t support this growth in our view. Population growth in Tasmania is mediocre, jobs growth below our expectations. We expect 2019 to be the year when Hobart bust cycle comes.
Uneducated Guess: Hobart property prices to peak in 2019
Perth property prices are starting to bottom out in our view. The economy is growing and the vacancy rates in Perth are starting to tighten up. We would love to see vacancy rates dropping further before the city starts to show some growth. At this stage perth is a mixed back when it comes to our property analysis. Population growth and job growth is not as great as we would like to see it, however there are some green shoots that we are seeing in the city.
Uneducated Guess: Perth property prices to go sideways in 2019
In the end. Not all ducks quack the same way. Some properties even in Sydney or Melbourne might still perform remarkably. Think an apartment with full view of the Sydney harbour that is prices well! Property like that is unlikely to be on the market for too long. We have no crystal ball, and everyone should perform their own analysis, but there are a number of metrics in property that could see it perform in worst times or underperform at best times.