With the countdown to the New Year well and truly upon us, here are 2019’s biggest property developments, according to CoreLogic head of research Tim Lawless.
Before closing up shop for the year, Mr Lawless and the team at CoreLogic have produced its Best of the Best series, taking a deep dive into the property market and what to expect in 2020.
For Mr Lawless, 2019 can be summed up as a year for records.
“2019 will go down as the year when new records were set,” Mr Lawless said.
“In 2019, we saw the housing market move through the largest and longest correction on record, followed by a fast-paced rebound in values through the second half of the year.
“Housing turnover fell to record lows in 2019, as did new advertised stock levels.
“Interest rates reduced to levels previously unseen, while the concentration of investors in the market also plumbed new depths.”
Another notable mention was that Australia saw one of the fastest recovery cycles, “with housing values bouncing back rapidly over the second half of the year, led by Sydney and Melbourne where values are around 9.5 per cent higher since finding a floor in May,” Mr Lawless added.
The biggest winners of the year, he said, have typically been premium value suburbs of Sydney and Melbourne.
“In fact, amongst the top 10 best-performing suburbs for growth, seven were located in Sydney or Melbourne and show a median value of at least $1.1 million,” he said.
Looking ahead to the New Year, Mr Lawless said the property market will paint a mixed picture.
“For 2020, we’re likely to see markets in recovery mode as housing prices catch up and then overtake their previous record highs; however, we expect the rapid rate of capital gains seen over the second half of 2019 to lose steam as stock levels rise and affordability deteriorates,” he said.
Another prediction touted by Mr Lawless revolves around the pace of growth expecting to remain positive but slow due to: worsening housing affordability, higher listing numbers (more choice and less urgency), and a weakening labour market.
“Some smaller capital cities could see improvement in conditions due to rising population fuelling housing demand, relatively healthy housing affordability although strength of labour markets remains a wild card in these markets,” Mr Lawless added.
“As housing values and housing demand rise, we should start to see building approvals trend higher, translating to a turnaround in the weak residential construction figures late in the year.
“Lower interest rates should support housing demand; however, lower rates could possibly dent confidence as households spooked by concerns around the economy and household finances.
“First home buyer numbers likely to fade as affordability impacts participation in the market, but investors are likely to be more active, chasing capital gains and opportunities for positive cash flow considering the inverted spread between mortgage rates and rental yields.”
In closing, Mr Lawless said: “2019 will see the housing market end the year in positive annual growth territory, with capital city home values likely to be around 2.2 per cent higher over the full calendar year – a remarkable difference from 2018 when capital city housing values were down 6.1 per cent.”