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Is Sydney’s Property Boom Over?
In the last year, property values in Sydney have continued to rise, albeit not at that same pace they have been in recent years. In the third quarter of 2017, property values have only increased by a modest 0.5% which has been the slowest quarter since last June. The city did, however, record double-digit growth of 10.5% over the year.
Nationally housing values have grown at their slowest pace since February, but still recorded an 8% increase overall.
Many experts have predicted the end of the boom in Sydney, saying that prices are now “levelling out and stabilising”, but the continued interest of Chinese buyers has kept prices reasonably stable with no decline in values according to CoreLogic, and Sydney is certainly not headed for a crash, which is defined as drops of 20% or more.
Melbourne experienced a stronger quarter than Sydney with dwelling values going up by 2.0%, but that too is the slowest growth it experienced in November 2016.
There is some good news for sellers in the mid-price range with a recent increase in first home buyers entering the market since stamp duty concessions were introduced.
The Australian Bureau of Statistics (ABS) showed first home buyers at 17.2% which is the highest percentage since 2009. In July this year, recent policy changes came into effect in NSW and Victoria which meant first home buyers were exempt from stamp duty for properties valued under $650,000 in NSW and $600,000 in Victoria, with a sliding scale of stamp duty payable up to $800,000 in NSW and $750,000 in Victoria.
The uplift in first home ownership as a result of these changes highlights that stamp duty was an important consideration in housing affordability and is good news for vendors selling homes within those price brackets.
The other good news for vendors selling investment properties is the acceleration in rental growth, with rents growing by 2.9% over the past year, compared to less than 1% in the prior year, which makes investment properties attractive for the savvy buyer.
While growth is slowing in the Sydney market, it is still moving up in value rather than declining, there are plenty of additional opportunities for vendors to market to different buyers, be it the first home buyer, the investor or the foreign investor.
Across the nation for the entire year, most capitals recorded value growth except Perth (-2.9%) and Darwin (-4.7%). Hobart recorded the largest growth of 14.3%, which is a relief for vendors there, who had suffered years of negative growth. Melbourne values increased by 12.1%, Canberra grew 7.8%, Adelaide was up by 5%, and Brisbane recorded modest growth at 2.9%.