Read Time: 4 minutes
Media outlets are bombarding us with scary news every day on the state of the Australian property market with talk of the almighty bubble and when it’s going to burst. A lot of property economists were off the mark in 2016, as they also were in 2015, with forecasts of declines and some even predicting an almighty crash.
Citibank was forecasting a decline in both Sydney and Melbourne of 6% and 7% respectively. Merrill Lynch told their clients to brace for a “Period of weaker price growth or outright modest declines”, HSBC predicted a decline of 2% in Sydney and CoreLogic stated that Sydney and Melbourne were “either at or very close to their peaks” and the Big Short Report predicted a US style correction of up to 50%. In saying that most did get closer to the mark on their predictions for Adelaide, Canberra and Hobart.
So let’s take a look at how the market ended up:
National (5 capital cities)
All dwellings: 10.83%
Houses: 11.55%
Units: 5.97%
Sydney
All dwellings: 15.46%
Houses: 16.74%
Units: 9.64%
Vacancies Rates (all dwellings): 1.9%
Estimated Population Growth in 2016: 1.75%
Melbourne
All dwellings: 13.68%
Houses: 15.08%
Units: 2.1%
Vacancies Rates (all dwellings): 2.0%
Estimated Population Growth in 2016: 2%
Brisbane (ex. Gold Coast)
All dwellings: 3.60%
Houses: 3.99%
Units: 0.16%
Vacancies Rates (all dwellings): 3.3%
Estimated Population Growth in 2016: 1.60%
Adelaide
All dwellings: 4.23%
Houses: 4.51%
Units: 1.07%
Vacancies Rates (all dwellings): 1.9%
Estimated Population Growth in 2016: 0.9%
Canberra
All dwellings: 9.29%
Houses: 9.60%
Units: 5.09%
Vacancies Rates (all dwellings): 1.2%
Estimated Population Growth in 2016: 1.4%
Hobart
All dwellings: 11.24%
Houses: 11.71%
Units: 6.70%
Vacancies Rates (all dwellings): 0.6%
Estimated Population Growth in 2016: 0.8%
Perth
All dwellings: -4.33%
Houses: -4.41%
Units: -3.19%
Vacancies Rates (all dwellings): 4.9%
Estimated Population Growth in 2016: 1.60%
Darwin
All dwellings: -0.93%
Houses: -0.21%
Units: 5.66%
Vacancies Rates (all dwellings): 3.4%
Estimated Population Growth in 2016: 1.90%
See a 30-second video here comparing national capital growth rates in 2015 and 2016.
It’s also really useful to see how the housing market figures washed up against the Australian sharemarket and Superannuation funds. Below are some facts on how Australia fared in a few different metrics.
• Australian Sharemarket (ASX) rose 7% in the 2016 calendar year
• Total return on Australian shares rose by 11.6% (share price plus dividends)
• The average superannuation fund rose 7.2% in the 2016 calendar year*
Australian economic snapshot:
• Unemployment stands at 5.7% down from 5.8% at the end of 2015
• Wages grew by 1.9% (year to September) a record 18 year low
• Population grew by 1.42% in the year to June for the decade average of 1.66%
• Retail trade grew by 3.5% in the year to October, close to the average of the past 7 years
• Consumer and business confidence and conditions are holding above long-term averages
• New car sales are just below record highs
• The number of new homes being constructed is at record highs
• The cash rate stands at 1.50%
• The Aussie dollar started the year at US73c and ended up at US72.40c. The range was between US68.24c and US78.35c.
Keep an eye out for our next article for our point of view on the Australian Property market for 2017 and beyond.
Milk Chocolate purchase residential and commercial property in Australia on behalf of Australians living abroad, looking for a home or investment property. To see how we can help you get in touch here.
Thanks Michael
* Data from SuperRatings based on balanced option superannuation accounts the option chosen by 60-70% of Australians
** Data sourced from: CoreLogic / SuperRatings / SQM Research / SMH / AFR / Big Short Report / Commsec
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