With the New Year well underway, it’s important to know what to look out for in the Australian property market in 2019. Whether your strategy is to grow your portfolio in 2019 or to simply hold your current properties, you’ll need to know what to be mindful of throughout the year.
As widely covered in the news and industry publications, the recent boom in Sydney and Melbourne appears to have peaked providing an opportune time to take a step back and assess the state of your portfolio. Other key drivers of change in the property market include the Royal Commission, a raft of macro prudential measures from APRA and tightened depreciation rules introduced in the last Federal budget. Beyond these changes, there are some additional things you need to be mindful of when it comes to property investing throughout 2019.
Across Australia’s capital cities, an oversupply of apartments is causing stagnation in the apartment market. As more buildings are expected to reach completion in 2019, apartment values can be expected to continue stagnating and declining. For this reason, 2019 is not the year to be buying an apartment off the plan.
Monitor interest rates
Interest rates have been held at record lows since they were cut from 1.65% to 1.5% in August 2016. With these record low rates, Australia’s big banks began raising mortgage rates around September 2018. With the potential for further mortgage rate increases, it’s important to seek the advice of a mortgage broker who may be able to help you find a better rate than those offered by the banks. This could also be a good time to determine if a fixed interest mortgage would better suit your needs.
Look outside Sydney and Melbourne
With the amount of attention focused on Sydney and Melbourne’s property markets, it can be easy to forget other areas across Australia with growth potential. For example, Brisbane’s detached housing market is expected to experience relatively strong growth in 2019. As with any location, make sure you’re identifying growing areas that are an easy commute to the CBD with an abundance of public infrastructure.
These are a few things that property investors generally need to keep in mind as they maintain and grow their portfolios throughout 2019. As always, make sure you source specific advice for your individual situation as you make changes to your portfolio.