by Marshall Cobb - Principal
Moody Analytics released a report this week that pointed to recent small monthly falls in the Sydney and Melbourne markets as a cooling, rather than a slump.
Looking at Sydney, they focussed separately on houses and apartments, saying that house values rose 12.8% in 2017, and are forecast to decline nearly 5% in 2018 before a recovery in 2019. On the other hand apartment values in Sydney are likely to retain their value and gain 0.6% in 2018, thanks in part to healthy demand.
It noted several factors are at play, including aggressive regulatory action to limit bank lending, higher borrowing costs especially for investors, and improved enforcement of limits on foreign ownership.
They also suggested that if the housing market looks to be on a sharper than expected cooling trend, there was "little doubt regulators would step in to try to restore order, at the very least by winding back some regulatory limits."
I agree with them. There is so much demand from people who want to live in Australia that we have to strictly enforce the limits on immigration. The government can easily and quickly lower interest rates, relax lending limits and/or increase the number of immigrants to soak up any over-supply of real estate. There are plenty of other countries who are not in such a fortunate position.
For long term investment success you really can't beat quality apartments in Sydney - and we happen to have a wide selection...