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What’s in store for the Australian property market from 2018 to 2021?

Posted by admin on December 6, 2018
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The Residential Property Prospects 2018-2021 report produced by BIX Oxford Economics released in late-2018 provided an outlook on the Australian property market. The forecasts in BIS Oxford Economics’ reports haven’t been 100 per cent correct, but that’s to be expected. These forecasts can only provide the most detailed forecasts based on the information available.

Like other reports, BIS Oxford Economics’ report detailed that there will be small price declines across the capital cities over the next 12 months, with property prices to continue growing from a modest 3% in Sydney up to 13% for Brisbane over the next three years to 2021. According to the report, population growth is expected to absorb the oversupply of apartments in capital cities like Brisbane, Perth and Canberra.

The median house price in 2018, forecast median house price in 2021, and growth rate for 2018 to 2021 is detailed below for each Australian capital city.

Sydney

Median house price in June 2018: $1.12 million
Forecast median house price in June 2021: $1.15 million
Growth rate 2018 to 2021: 3%

Melbourne

Median house price in June 2018: $870,000
Forecast median house price in June 2021: $920,000
Growth rate 2018 to 2021: 6%

Brisbane

Median house price in June 2018: $550,000
Forecast median house price in June 2021: $620,000
Growth rate 2018 to 2021: 13%

Canberra

Median house price in June 2018: $700,000
Forecast median house price in June 2021: $770,000
Growth rate 2018 to 2021: 10%

Perth

Median house price in June 2018: $520,000
Forecast median house price in June 2021: $570,000
Growth rate 2018 to 2021: 10%

Hobart

Median house price in June 2018: $485,000
Forecast median house price in June 2021: $525,000
Growth rate 2018 to 2021: 8%

Adelaide

Median house price in June 2018: $510,000
Forecast median house price in June 2021: $555,000
Growth rate 2018 to 2021: 9%

Darwin

Median house price in June 2018: $505,000
Forecast median house price in June 2021: $520,000
Growth rate 2018 to 2021: 5%

QBE’s National Australian Housing Outlook detailed similar figures. For the three years to 2021, QBE has detailed the following 2021 Economic Indicators:

  • Interest rates to raise by 0.5% to 2% by 2021.
  • Inflation to continue growing slowly, reaching 2.7% by 2021.
  • Employment growth decreasing to 1.9% by 2021.
  • GDP growth will remain unchanged at 2.9%.

While these economic indicators aren’t demonstrating a huge property market boom in the next three years, they’re also not demonstrative of a property crash. Like market forecasts in any industry, the most powerful way to use these reports is to read widely and make your own assessment.

A key part of any investment strategy is understanding your risks and seeking the advice of professionals who can help you mitigate those risks. If you’re unsure of how to approach your property investing or you’re a new investor learning to navigate the market cycles, make sure you take the time to research and understand the markets for your current and future investments. The time and money invested upfront in your education could pay great dividends down the track.

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