Surf Coast set to ride out soft landing

ONE Agency Torquay has evaluated the most recent market trends and believes that many reports that suggest Australia’s housing boom is coming to an end are incorrect.

The boutique agency, headed up by Shaun O’Callaghan, is confident that the Surf Coast property market will remain strong compared to other Australian markets, given the increasing demand from buyers and a lack of available properties for them to buy locally.

“The enviable lifestyle of the Surf Coast is an obvious drawcard; however, this has been enhanced by greater job stability, career advancement opportunities and healthy salaries offered by Geelong’s new corporate employers, plus the continuing building boom,” he said.

“The median house price for Torquay was $720,000 in January 2018, this is up from $678,000 in January 2017, a growth of 5.83 per cent in 12 months.”

HSBC’s chief economist for Australia, Paul Bloxham, suggests that the end of the housing boom is more likely to be a soft landing rather than a property market crash.

Although he suggests that a hard landing is possible, he believes this would require a negative shock from abroad and a sharp rise in the unemployment rate.

“We do not see a significant local housing imbalance and view Australia as having had a housing boom rather than having a housing bubble,” he said.

House prices in Sydney and Melbourne were growing at low double-digit annual rates over the past five years, however, during the past six months Sydney prices fell an average of one per cent and Melbourne’s annual price growth slowed to seven per cent.

Mr Bloxham said the slowdown in Sydney and Melbourne was driven by increased supply, many vendors aspiring to inflated prices, higher lending rates for investors, wary buyers and a retreat in foreign demand, which had softened partly due to lending constraints by domestic banks and higher local taxes.

HSBC revised down its forecasts for Sydney and bumped up 2018 predictions for Melbourne, given recent trends and changes in population growth estimates.

In spite of all the stresses and pressures in the market, Mr Bloxham said Sydney housing prices were tipped to grow by 2 to 4 per cent during 2018, while growth was expected to be between 7 and 9 per cent in Melbourne.

The softening of market value growth around the country will offer some relief to buyers who have been struggling with ever-increasing house prices in most major cities, but the good news for sellers is that there’s no need to panic.

CoreLogic’s Hedonic Home Value Index showed that in November there was an average of just 0.1 per cent fall in capital city dwelling values but this was offset by a 0.2 per cent rise in regional values, and by its very nature, the housing market will always have ups and downs. Property identity Mark Bouris reminds us that property value is influenced by market sentiment, interest rates and economic data.

While you can’t control these factors, you can control your investment timeline, and suggests viewing property investment in 10-year windows and trying to buy well.

With the Surf Coast property market remaining strong, One Agency’s Shaun O’Callaghan says that properties in Torquay and Jan Juc are in high demand, with a record number of inspections occurring.

For more information on the Torquay or Jan Juc real estate market, or if you would like to know the value of your Surf Coast property, phone Shaun and Olivia at One Agency on 5261 4711 or email [email protected].