5 Property Trends in Metropolitan Areas for 2015
2013 was a good year for property markets across Australia’s capital cities. 2014 consolidated on this growth. The next question is what will the future for capital city property markets hold in 2015? While it depends who you ask, many analysts including agents in inner city agencies like Templeton Property predict continued growth in Australia’s capitals is looking exceedingly unlikely. However, property trends across Australian capital cities are more complex than simply growth. With that said, here are some other trends expected to make their mark in 2015 and beyond.
First Buyers Forced to Make Compromises
It’s no secret that for first home buyers, buying a detached home in capital cities has become increasingly out of reach. This has meant that while first home buyers continue to decrease, those that do have the resources to buy are increasingly being forced to make compromises. This includes living further away from their workplace, or continuing to rent modest sized properties while buying investment properties in regional areas.
Expected Oversupply of Apartments and Units
With many high rise complexes set for completion in 2015, and many more approvals for multi-storey residences in inner Brisbane, Sydney and Melbourne, property observers are tipping an oversupply. This will mean that investors will face greater competition to rent their home and they may have to reduce rental yields.
Slower Growth Across Capital Cities
In good news for buyers – and perhaps disappointing for sellers – slower growth looks set for 2015. In many capital cities including Melbourne and Perth, growth has slowed since mid 2014. Brisbane, which experienced slower growth in 2013 than its capital city counterparts, is expected to be the strongest performer for property owners in 2015 as supply remains constrained.
Interest Rates remain on hold – at least for most of 2015
In good news for mortgage holders Australia wide, interest rates look set to stay on hold for the majority of 2015. The cash rate is currently at a 50 year low of 2.5 per cent, and has been for the last few months. This is expected to remain the case for most– if not all – of 2015, as Australia’s economic growth remains fragile from stubborn unemployment levels and benign inflation.
Block Sizes will continue to decrease
No you haven’t imagined it – blocks are getting smaller. New homes built in 2015 will be on even smaller blocks. Land sold in 2015 in new developments across Australia’s capital cities is on average between 200-250 square metres. This is a far cry from the average of 600-700 square metres new homes were built on in the 90s. This long-term trend is expected to continue with new land released in 2015. This will especially be noticeable in suburbs closer to the CBDs of Australia’s capital cities as demand for detached living remains high while area available to build remains scarce.
With stable interests, slowed growth, an oversupply of apartments, and compromises needing to be made among first home buyers, market conditions into 2015 appear reasonable but are not without their challenges. Like all areas of the market there will be winners and losers – hopefully you come out on top!