With the exception of Perth and Darwin, it’s been a year of growth for all the capital cities, with Melbourne and Sydney being the clear winners thanks to unprecedented overseas investment. Despite optimism in the broader Brisbane market and an incredible recent run for Sydney and Melbourne, these capitals are all facing speculation now about oversupply and a looming correction, in particular when focusing on the city apartment market.
Right now it’s nearly impossible to go a day without reading or hearing about these risks, as well as valuation shortfall fears, new East Coast property taxes, shrinking yields, increasing vacancy, tightening policy on investors, banks pulling out on foreign lending, if foreign investment will carry or collapse the East Coast market …the list goes on.
On the other side of the island Perth sits somewhere at the bottom of the property cycle with no one able to agree on when the inevitable upswing will come, but most acknowledging that the only way is up from here.
According to the latest ANZ/Property Council Survey of sentiment in the industry, confidence among property professionals – institutional investors, developers and consultants – has weakened to a three-year low.
Despite this the industry is still optimistic as population growth remains steady and internationally Australia continues to have a high degree of stability, economic growth and low sovereign risk. Australia has a reputation as being a safe haven and this will be more the case now with what is happening in Europe. Australia is going to be seen as increasingly safe and Perth particularly is representing real value for money compared to the traditional FIRB investment centres of NSW and Victoria.
Click here to see the June 2016 Core Logic Housing Market and Economic Update.