Welcome to this fortnights blog. It will be an interesting year for property in Australia with Sydney’s market now 3% below its peak in July 2017 and Australia down 0.7% from its highs late last year.
However, low mortgage rates, strong jobs growth and falling unemployment along with high migration and supply constraints should see a soft landing in Sydney and while Melbourne growth will slow, we still expect to see Melbourne perform well in 2018. In today’s blog we will take you through our prediction for the Melbourne market and next fortnight we will be covering Brisbane.
House and land in the north-west of Melbourne and Geelong, price point town houses in the south-east and north-west as well as boutique apartments in very selective parts of the south-east of Melbourne are likely to perform best.
House & Land
The north-west of Melbourne is undervalued in comparison to the south-western corridor, which has increased by over 40% over the last 2 years. It will also be pulled up by the substantial growth just south in Caroline Springs – less than 5 minutes’ drive from our recommended estates.
Geelong, our best performing pick in 2017 experienced 14% growth and we expect that growth to continue in 2018. Geelong is Melbourne’s equivalent to Wollongong or the Central Coast in NSW – being well connected to the metropolitan area by train and road as well as offering a great seaside lifestyle. Geelong will further benefit from large population moves from Melbourne as well as huge jobs growth. There has been 10,000 new jobs since 2006 and over 1.3 billion in infrastructure spend already delivered with 2.3b more in the pipeline.
With prices moving forward rapidly for houses in Melbourne, Nyko believes price point town houses in both the north-west and south-eastern regions of Melbourne will perform extremely well – bringing affordable living to locations were some Australians are now priced out.
Lastly, middle ring apartments in small developments in extremely selective suburbs will also perform well. It is even more important to do your research here – while we believe there will be some great performing apartment developments it will be much easier to get it wrong in this space.
While we expect the Melbourne market to continue to perform in 2018, there will certainly need to be much more care taken with the selection of property and locations. Contrary to 2017 and 2016, the majority of suburbs will not be winners in Melbourne this year – it is more important than ever to make sure you get great advice and do your research before making a purchase.