Now that 2016 is coming to a close and homebuyers and sellers will be winding up their transactions, it’s time to consider what the market will be like next year. While no one has a crystal ball, we can make some educated assessments about the future of the market in the upper northern part of Sydney.
The differences between 2015 and 2016 were stark across all of Sydney. Last year was characterized by a sudden slowdown from mid-year onwards in the auction market that continued until the early months of 2016. And this year, auction clearance rates surged just four months into the year and have barely stopped since. We’d imagine 2017 will be just as unpredictable, but there are some likely scenarios to consider.
Firstly, we’re not anticipating any major slowdown this year or next year. Stock levels are still so low that it would take a significant surge of properties onto the market to make price growth slow dramatically. This also means sellers will continue to have the upper hand in the early months of 2017 and while the auction market will slow due to seasonality over December and January, it’ll likely heat up again.
The apartment market is also likely to hold up relatively well, compared to other sections of Sydney where there has been intense building. As there has been far less development on this side of the city, many predictions of price falls in the apartment sector are irrelevant to homeowners here. The boutique developments that have been underway should continue to attract strong inquiry from buyers.
We’re also expecting that the Reserve Bank will continue to keep interest rates on hold for a while, particularly after the steady result on Melbourne Cup day. Most economists seem to expect there may be another rate cut in 2017, but it will likely not be until a few months into the year. The Finder Rate Survey has most experts predicting rates will go no lower than 1% or 1.25% by the end of the rate cutting cycle.
As a result, property price growth in the upper north is likely to continue on – though at single growth rate figures closer to 5% per annum than 5% a quarter as we had seen in previous years. This will be a welcome relief to homebuyers who have been concerned about skyrocketing prices and sellers who know they can sell and then buy into a stable market.