Want to own a house and investment property in Australia? Don’t purchase just yet for house prices are predicted to fall and stagnate in the next three years.
Australia’s top analytics firms, CoreLogic and Moody, has released a joint report states that Sydney property house prices are expected to drop this 2018 and stagnate through to 2020. The projected Home Value Indices shows that Sydney home prices will rise about 7.2 percent this year then fall between 0.3 and 1.4 percent between 2018 and 2020. This is due to the rapid increase of mortgage rates from the banks making interest rates that will level off in response.
As per Sydney apartment, it is expected to rise 7.5 percent this year then fall 1.2 percent to 0.7 percent then 0.4 percent in the next three years. Not worry, prices will again rise after those years but nowhere near the growths of the past four years.
It says in the report that “Although we do not expect a steep decline in prices, Sydney’s property market will likely stagnate through to 2020 as interest rates begin to normalise. The degree of correction will likely be uniform across apartments and detached houses,”
Prices of detached houses in Melbourne will follow the same pattern. It will rise 7 percent by the end of the year then fall between 0.5 and 1.8 percent by 2020. Apartment prices on the other hand will continue to rise from 3.4 percent with a margin increase between 1 and 1.2 percent. “Contrary to popular belief, the correction will likely be more severe in Melbourne,” the report says.
Great downturn in house prices will not happen but the amount of price fall will be felt only by top-end investors. Outside the major markets of Australia, it is expected to make a slight recovery in Perth’s housing value. You will also see a slight increase in Adelaide, Brisbane and Hobart.