Realtors are predicting that commercial and residential property prices and sales in Australia will remain strong throughout 2016, as business confidence continues to improve. This is despite Sydney, Melbourne and Perth recording a fall in home prices during the closing months of 2015.
According to the latest National Australia Bank (NAB) business survey, business conditions have improved from 9.8 index points to 10.2 points in November. In addition, business confidence rose by 2 points, from 2.8 points to 4.8 points.
This trend is expected to expand into other markets with a ripple effect flowing into Australian residential property. This is attributed to the fact that the Australian dollar is lower and consumer confidence is continuing to improve.
Currently, the official Australian cash rate is sitting at 2%, a historic low. However, the Reserve Bank of Australia (RBA) has stated that it’s not opposed to cutting rates further if this is needed to spur on economic growth post-Christmas.
At present, Australia’s GDP growth remains below average, but business surveys suggest that the service sector will continue to improve. This will likely assist the Australian economy to attract offshore investment during 2016.
After hitting an all-time high growth level of 12%, the Sydney property market is cooling and is anticipated to drop to a level of 4% during 2016. However, data suggests that some areas in Sydney will record between 5 to 10% in growth over the next 12-months.
Sydney’s Top 10 Suburbs for 2016
|Chester Hill||Canterbury Bankstown|
|Chatswood||Upper North Shore|
|Lane Cove||Lower North|
|Woollahra||City & East|
|Maroubra||City & East|
Realtors anticipate that the lower north, city and east will be the best performing areas in Sydney during 2016. For those home buyers with a smaller budget, then Tempe, Minto and Tregear represent good value and are suburbs that are tipped to perform well.
Melbourne’s most sought-after suburbs aren’t situated on a foreshore or considered prestige, instead they are budget orientated and middle-priced. This is due to the fact that many home buyers are seeking to find a property that is affordable.
The most heated growth in Melbourne’s property market, during 2015, was in the inner eastern and southern suburbs of the city. Home buyers who are now seeking value are anticipated to move their search to the middle and outer suburbs, which, in turn will push-up property prices in these regions.
Noble Park, which is considered as a working-class suburb, is expected to be the pocket-rocket in the south-east with growth estimated to be around 6%. Carnegie and Clayton in the south-east, Brunswick East in the north and Heidelberg West and Templestowe Lower in the north-eastern region of Melbourne are also expected to be good performers.
Melbourne’s Top 10 Suburbs for 2016
|Suburb||Region||Expected Growth Rate|
|Heidelberg West||North-east||6 %|
|Noble Park||South-east||6 %|
|Mt Waverly||Outer-east||5 %|
The city is expected to show signs of improvement during 2016, with the outer-suburbs offering lift in an otherwise repressed market. While Brisbane was expected to have a sound year for property price growth, the city is said to have failed to deliver. During 2016, Brisbane is expected to have only marginal growth of 3 to 4%.
The areas of best performance are expected to be Redcliffe, with a low median value of approximately $400,000. Realtors expect to see more investors and home buyers taking advantage of low interest rates.
Brisbane’s Top 10 Suburbs for 2016
Perth’s most unfavourable suburbs are tipped to become the city’s best performing suburbs in 2016. Price growth is expected to skyrocket in Armadale, Rockingham, Warnbro and Bayswater, with a return of around 4% being realised. Perth’s slumping home prices are expected to bottom in 2016 and to start to rise again by the end of this year.
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