Menu
Property

House prices should drop in 2018

Here’s what we can expect from the property market in 2018.
Here’s what we can expect from the property market in 2018.

REAL estate experts are expecting property prices to fall in 2018 - but not enough to help first home buyers get a foot on the property ladder.

Perth real estate agent and property expert Geoff Baldwin said he expected the Sydney and Melbourne markets to cool slightly in the New Year, with demand growing in Perth.

Mr Baldwin said Sydney's "ridiculous" property prices had been caused by "emotional" buying - and that prices were due for a degree of correction.

"In my opinion Sydney is 10 per cent over the top value-wise and I can see it taking a bit of a hit. Traditionally when Sydney slows Perth takes off and we're already seeing interest from Chinese buyers and prospective developers," he said.

"A slowdown is absolutely coming for Sydney - prices are just ridiculous - and the market has been pushed very hard by foreign investment and buyers. Chinese money is going out of Sydney and probably Melbourne as well and coming to Perth.

"Brisbane is pretty solid and healthy, it's not overpriced, and we're seeing reasonable activity without it getting overheated. Hobart is on fire compared to recent years in Tasmania, and the Northern Territory is off the boil."

Mr Baldwin said the mining industry was picking up in Western Australia and migration was increasing, which in turn was strengthening the property market.

As a result, he said Perth was becoming an attractive option for investors who might not be able to afford to buy in Sydney or Melbourne.

"Absolutely it's a good time to buy now in Perth, it's certainly not going to get any cheaper. It's the perfect storm with low interest rates and prices and availability," he said.

"In Sydney prices are just crazy and the closer to the CBD you get the crazier they become. It won't come back to an affordable point but my prediction is there will be a 10 per cent drop in prices, especially for high-density apartment prices over the next few years.

"What tends to happen is that when the market turns people try to sell, and end up selling for below what they paid.

"But it will be a long wait before Sydney gets to an affordable level and I don't think that will happen - it's almost impossible to buy a first home unless you go a long way out from the CBD."

This Sydney mansion recently sold for a mammoth $67 million. Picture: NSW Real Estate.
This Sydney mansion recently sold for a mammoth $67 million. Picture: NSW Real Estate.

Melbourne-based CBRE commercial real estate specialist Mark Wizel agreed that housing affordability was at a "ridiculous" level - but he said while prices were dropping slightly due to a recent increase in supply, he believed demand for property would remain strong.

He expected an increased demand for property in Melbourne's inner ring thanks to migration and work patterns.

"I anticipate strong price growth within 15km of the CBD. The blue chip market is going from strength to strength with both domestic and overseas buyers having very deep pockets," he said.

"The wealthy are getting wealthier, the middle class is evaporating and people at the bottom of the chain are doing it tougher than ever which is a real problem - but for those blue chip inner ring suburbs, prices will continue to escalate.

"Overall the commercial market has a massive supply and demand imbalance - which is the opposite of what's happening with residential ... but the office market is going from strength to strength and vacancy rates of office spaces around Australia are reducing. The office market will be outperforming all other markets over the next 24 months."

alexis.carey@news.com.au

Topics:  economics editors picks house prices housing housing affordability


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Wave Rave: The bay finally gets some waves

TURN FOR THE BEST: Tahiti's Vahine Fierro in action.

A strong southerly swell that hit The Shire last Monday.

WATCH: Adani activists shut down coal port

Anti-Adani protesters have locked themselves to a coal handling facility at Abbot Point Coal Terminal.

Beefed up security doesn't stop dogged protesters

WEIRDEST EVER: Re-live 1997's Hottest 100

The Whitlams are an Australian indie rock/piano rock group formed in late 1992.

What do Kylie Minogue and Marilyn Manson have in common?

Local Partners