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The year that was for property investors

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The year that was for property investors

by Cameron Micallef 05 December 2019 1 minute read

Property investors have seen it all over the past 12 months, from markets in freefall to a market showing strong signs heading into the new year.

December 05, 2019

According to Herron Todd White, it was a year of two halves, with the May federal election being the turning point.

The year began with the fallout from the royal commission, which saw 76 recommendations for reforms. The tighter credit restrictions led to housing prices continuing to fall.

With fears of negative gearing reforms, the housing market continued to suffer with institutional investors leaving the market.

The federal election was held in May leading to “returning the Liberal-National Coalition government to power in what was a Steven Bradbury-like performance”, Herron Todd White noted.

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This led to an uptick in the housing market, with a relaxation around lending, leading to markets showing signs of life.

Sydney

The end of 2019 is in sight, and markets across Australia, having worked through the spring selling season, are preparing for the Christmas period.

Over the coming weeks, you’ll begin to see an increasing number of retrospective reports about Australia’s real estate market.

At the beginning of 2019, Sydney was forecast to continue to weaken, until the elections, which were a line in the sand moment for Australia’s largest city.

With interest rates down to record lows in October, the market recovery appears to be in full swing, with CoreLogic reporting 5.71 per cent growth in the most recent quarter across the Sydney metro area, Herron Todd White suggested.

Melbourne

The royal commission and the election also had an impact on Australia’s second-largest real estate market. 

Property was very subdued until the third quarter of the year when reductions and removal of serviceability criteria led to an uptick in the market, Herron Todd White showed.

Media house prices in Melbourne increased greatly from Quarter 1 to Quarter 3 of 2019. This could be the result of the property market stabilising from the conclusion of the federal election, two consecutive rate cuts by the Reserve Bank in June and July, and the easement of home loan serviceability tests.

Brisbane

Brisbane presented as the “value for money” city. However, markets did not live up to expectations, with Herron Todd White calling for “restrained optimism”.

Significant headwinds manifested via the fallout from the royal commission, APRA’s tighter lending guidelines and, of course, the federal election. Throughout all this, Brisbane’s market experienced limited activity and demand, with a slight softening in values across the wider city.

Adelaide

The South Australian market is renowned for shadowing the major east coast markets, always a step behind.

At the beginning of 2019 the city’s outlook was somewhat murky. The South Australian metropolitan house price had grown quarter by quarter since September 2017.

Perth

Perth continued its downward trend towards the bottom of the market, although large-scale public and private funding is tipped to push up investment in the Western capital.

Significant mineral resource investment is one factor influencing Western Australia’s population over the year. In an article in August 2019 by Mark Beyer in Business News, he said:

“Of the 12 biggest mining projects under way or likely to proceed this year, seven are in the iron ore sector. The expected investment in the iron ore projects is $17 billion, out of a total investment of $20 billion across the top 12 mining projects.”

The year that was for property investors
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About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your... Read more

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