We hope that you and your family enjoyed a fantastic Christmas and New Year!

With the summer holidays in full swing, auction activity in our property markets around the country has been a little quiet as home buyers forego the open inspection circuit in favour of the beach. So this month let’s do a review of the nation’s property market performance in 2017.

Read on to find out how your property market performed and what’s in store for 2018.

2017 Home Values
In the last quarter of 2017, month-on-month home value growth rates slowed considerably. In October and November there were little capital gains achieved across most capital cities.

However, across the year growth remained very positive in most markets. Darwin and Perth were the exception, where growth was still in negative territory during 2017. The good news for these markets is that analysts are expecting them to pick up somewhat this year, as employment and economic growth look set to improve in both regions.

In terms of capital growth around the nation, the outstanding performer for 2017 was Hobart at +12.25% pa. Check out the table below for a quick look at how your local market performed.

 

City	% pa change 2016 to 2017
Sydney	+3.09
Melbourne	+8.89
Brisbane	+2.35
Adelaide	+2.98
Canberra	+4.87
Hobart	+12.25
Perth	-2.30
Darwin	-6.52

 

2017 Interest Rates
Even though we haven’t seen an official rate rise from the Reserve Bank of Australia (RBA) since 2010, interest rates did increase for both owner-occupiers and investors in 2017. On average, owner-occupier variable interest rates went up by 0.15% pa and the average variable investor loan went up by 0.34% pa.

Lenders indicated that the reasons for these increases outside of RBA movements are their increasing costs, other economic factors and a crackdown on risk management by regulatory bodies like the Australian Prudential Regulation Authority (APRA).

What’s in store for 2018?
CoreLogic is predicting the RBA will make no rate increases during 2018. This is good news for new home buyers, property investors and current home owners alike. 2018 will be a great time to focus on paying down your mortgage whilst interest rates remain low.

The slow-down in home value growth during 2017 is a sign the nation’s property market may be cooling. According to CoreLogic, the softening in the market is being driven by restrictions on interest-only loans by APRA. This restriction has significantly reduced property investment activity and therefore there is less competition to drive up prices. This is good news for first home buyers and we should see this sector of the market pick up during the first quarter of 2018.

Call us now for a home loan health check.
An increase of 0.15% pa (or in some cases more) on your home loan can amount to a significant rise in your mortgage repayments – however our lending market is still very competitive. If you’ve had your home loan for a while, now is the time to talk to us about a home loan health check. We’ll be happy to compare the market to see if we can secure you a better rate with a different lender.

Remember, we’re here to help you to manage your mortgage and support you to achieve your property goals in 2018. Please give us a call for a chat about your plans. We’d love to hear from you!

Source: www.rba.gov.au, www.corelogic.com.au