Sydney property prices – what a subject. It seems that almost everyone has an opinion on them, but no one seems to be too certain about which direction Sydney property growth is headed in.
Some major economists and news media say property in Sydney has hit its peak, and the housing market in 2016 is looking to finally burst.
But you know what I say? I say take all advice with a grain of salt. Including mine. And I don’t say this because I don’t know what I’m talking about – because I do. But you’re smart, and if you exercise a bit of caution when reading about property prices, you’ll be able to decide what’s right for you.
What is the Sydney property price bubble?
Australian house prices – and Sydney’s in particular – have been steadily inflating since the late 1980s. Data from the ABS showed that Sydney house prices had risen almost 20% in the year, the biggest annual rise for Sydney in a decade.
Source: The Guardian via ABS
So when people talk about the Sydney property bubble bursting, it’s based on the market prices growing much quicker than normal. Which is sort of right, in a way. Along with a growth in housing supply, Sydney’s home owners have enjoyed growing property prices.
But the market is currently seeing reduced growth. But this doesn’t mean prices are dropping drastically quite yet, or that there’s a bubble about to burst. It just means that house prices aren’t inflating as quickly as they were before. After all, you’re going to run out of air at some point.
What can we expect in 2016 for Sydney property growth?
Predicting the rise and fall of the housing market in 2016 is largely a game of educated estimating. There are many, many factors which contribute to changes in the housing market, which means there’s a tonne of data to sift through and analyse.
Pair this with APRA restrictions, federal government policy changes to home ownership, taxes, and local government restrictions, and you have the future of the Australian property market place at the whim of a number of variables.
A lot of this data is available to the public, but unless you’re an economist, I recommend sticking to staying on top of property prices via mainstream media…but use your own smarts when it comes to believing what you see, hear or read.
Will Sydney house prices drop?
Maybe :). Take a look at the data from 2011 – property prices were less than half of what they are now. But note that they came right back up, and the same goes for every house price drop that’s happened in the past.
My advice? Know what you can afford. Choose the right team of experts to help you with your mortgage. And focus on what you can control, like your credit score and home loan deposit.