Herron Todd White have released their first property clocks of 2020, along with their predictions for the year ahead. According to HTW it’s set to be an exciting year, with the end of 2019 putting 2020 into a great position. HTW content that is low interest rates (which are at a historic low of 0.75% after three cuts last year) have helped to stimulate the economy, along with the easing of lending serviceability restrictions boosting buyers borrowing capacity, whilst a sellers increase in confidence have all contributed. House and apartment prices are rising again in the major markets of Sydney and Melbourne, while more and more first home buyers are entering the market due to incentives, driving overall market confidence.
With all of this in mind, let’s see what 2020 has in store:
With a strong finish to 2019, Sydney is expected to perform well throughout 2020 according to HTW. This is a very different story to this time last year, when tightening credit due to the banking royal commission and widespread negative sediment had everyone experiencing a significant property downturn.
As you can see in the Property Clocks above, Sydney is in a great position now, the bottom of the market. If you believe in the buy low sell high motto, this should be a great time to buy, particularly because HTW expect to see prices increase by around 10 percent for the year, which will mean prices should move above their boom time peak in the second half of the year. Something that they highlighted is the fact that there are a number of new infrastructure developments that have recently opened or are set to open soon, which will continue to strengthen prices in the suburbs around these new links.
As you can see on the Property Clocks above, Brisbane is poised to have a great year in both apartment and house markets. 2020 is set to be a positive year for the Brisbane market, particularly due to the fact that interstate migration is increasing at a “healthy level”, according to HTW, due to the state’s affordability and attractiveness to southern retirees. Combined with an infrastructure boom set to drive the Brisbane economy through to 2025 (at least), 2020 is only looking up.
If you want to invest in Brisbane, then you’ll get the best returns on properties closer to the CBD. Detached housing is what you need to keep your eye on in 2020, as properties close to the CBD are expected to have great growth premiums. If you’d prefer to invest (or buy) an apartment that would appreciate, you still want to stay close to the CBD — but ensure you’re buying somewhere close to major transportation links, as these projects tend to offer superior returns.
Melbourne has seen an influx of new apartments in the CBD area over the past few years, causing prices to drop. With demand expected to remain steady as interstate migration grows and a reduction in new approvals, Melbourne is poised to be a great market to invest in throughout 2020. Interestingly enough, Melbourne has an issue with settling off-the-plan apartments due o major lenders tightening or altering their lending practices in regards to foreign investors, so local investors may find the more options in the market.
According to the report 2020 is also the year to buy a house in Melbourne, with more homeowners expected to return to the market after a year of uncertainty. Clearance rates are currently strong which bodes well for the coming months. he report goes on to say that those considering buying closer to the city should look in western Melbourne suburbs, including Footscray, Sunshine and Truganina.
Despite the fact that most Australian’s love to hate it, Canberra is one of the best performing markets in the country right now. Population growth is greater than 2% year-on-year, infrastructure updates well underway, and growing job prospects make Canberra the place to be according to HTW. Given that most parts of Canberra had a great year — records were broken when a house sold for $5.85 million, in fact — 2020 started on the best possible step and HTW believe that Canberra will go from strength to strength throughout the year.
HTW expect apartment sales to remain similar to last year, with demand being met by several apartment developments that are coming onto the market. Rental income is expected to be high due to low vacancy rates.
HTW recommends that if you’re looking to buy a house, established suburbs are going to be in demand throughout the coming year, particularly in the popular inner south and inner north. Ainslie and Yarralumla are leading the field with regards to median house prices which are well over $1 million. At the other end of the scale, areas further away from Civic (or CBD for the non-Canberra natives) have a lower median house price such as Belconnen ($375,000), Charnwood ($458,000), Banks ($488,500) and Phillip ($490,000).
Overall the first HTW Report for 2020 is extremely positive. It is set to be a strong year for the Australian property market, and investors and owner-occupiers alike are likely to benefit.