If banks “return to more reasonable lending standards”, several major capital and regional locations would be on track for “solid” price growth in 2019, Propertyology has said.
According to a new analysis from property market research firm Propertyology, several capital cities, including Adelaide, Brisbane, Canberra, Hobart, and Perth, could report home value growth as high as 10 per cent in 2019, if banks ease their lending standards.
According to Propertyology, if banks “return to a sensible credit policy” in the first quarter of 2019:
- Adelaide’s prices would increase 2-5 per cent
- Brisbane’s prices would increase 3-6 per cent
- Canberra’s prices would increase by 2-5 per cent
- Hobart’s prices would increase 7-10 per cent
- Perth’s prices would increase by 4-7 per cent
Propertyology added that if banks “return to a sensible credit policy” in the second quarter of 2019:
- Adelaide’s prices would increase by up to 3 per cent
- Brisbane’s prices would increase 1-4 per cent
- Canberra’s prices would increase 1-4 per cent
- Hobart’s prices would increase 5-8 per cent
- Perth’s prices would increase by 2-5 per cent
Propertyology head of research Simon Pressley said the forecast defies the current “consensus” view that markets are in the “doldrums”, claiming that such a view has been shaped by housing market conditions in Sydney and Melbourne, where prices dropped by 8.9 per cent and 7 per cent, respectively, in 2018.
“The consensus view is also based on the here-and-now and with an apparent lack of understanding of how underlying fundamentals might shape things just over the horizon,” he said.
“History is littered with masses of people following the consensus when making important property decisions only to subsequently realise that things looked a lot different a year or two later.”
Mr Pressley added that there were “obvious signs” of potential booms in “myriad” locations for anyone who was prepared to look past Sydney and Melbourne.
Mr Pressley said that many of the markets tipped to grow in value this year had a number of fundamentals that supported the forecast, including jobs growth, early signs of increasing wages, tight housing supply and falling rental vacancy rates.
“On a national level, our economy is looking better than it has for years with unemployment at 5.1 per cent, the federal budget set to be in surplus for the first time in a decade, the economy growing, and our population set to increase by more than 350,000 [this] year,” he said.
The research analyst continued: “Interest rates aren’t expected to rise until 2020 at the earliest, plus the international student, tourism and mining sectors are all strengthening and creating even more jobs.
“There is a long list of big-picture, positive stuff, which collectively paints a very bright future.
Mr Pressley concluded: “Believe the doom and gloom reporting if you wish, but [there] will be locations that experience a property boom over the next few years.”