The Sydney property market has kicked off the New Year on a strong note, with the first round of auction results revealing a robust clearance rate of around 87 per cent.
Many experts are predicting Sydney prices will continue to rise, but probably not at the rate we have experienced over the past two years.
SQM Research Founder Louis Christopher believes values will rise between 6 and 10 per cent with a possible correction occurring in 2018. “The market will sustain its current momentum and rise again in 2017, however 2018 may well be another matter,” he said in a recent Financial Review article.
“We’re getting around 90,000 new people coming to both Sydney and Melbourne every year. They all need accommodation and quite a lot of them have some home purchasing power.
“The Sydney and Melbourne economies have kept the country out of recession and there’s a strong correlation between a city’s economy and their housing market.”
Meanwhile the 2017 ANZ Property Council Survey found property professionals are feeling more confident than they were a year ago about the prospect of further price growth.
Airbnb Under Review
Many strata residents and owner corporations will be heartened to hear new Premier Gladys Berejiklian is being called on to consider giving buildings the right to ban Airbnb.
While some are fans of the short-term letting scheme, many owners are not happy with holiday makers coming and going in their buildings, with complaints ranging from party noise to a general lack of consideration.
A parliamentary inquiry into the adequacy of the regulation of short-term holiday letting is now underway, with the government due to respond in April.
Interest Rate Movements
Debate rages on for experts on the direction of interest rates this year, with more than half expecting another rate cut in the official interest rate. Most of those predicting the rate cut think it will happen in the second half of the year, according to the recent Sydney Morning Herald report.
But while official rates may edge downwards, many banks have already increased rates with a Rate City report showing two-thirds of all lenders increased fixed loan rates towards the end of the December quarter, with a smaller number increasing variable loan rates as well. Despite the slight rise, we are still enjoying some of the lowest interest rates in Australian history.