Our 2018 property predictions for Melbourne’s northern suburbs
Here at Nelson Alexander, we’re always asking “What does the future hold for Melbourne property?“.
So, with the new year upon us, we sat down with our team to wager some predictions for what would happen in the markets we serve over 2018.
We looked into our property market crystal ball to see what’s in store for 2018.
1. We’ll see a boom in first-home buyers
Last year, the Australian Prudential Regulation Authority (APRA) announced a number of supervisory measures to tighten up lending to residential property investors.
According to APRA, the purpose of these restrictions was to:
- Limit interest-only lending to 30 per cent of total residential lending,
- Manage lending to investors to comfortably remain below the 10 per cent growth benchmark,
- Review interest rate and net income levels,
- Restrict lending growth in higher risk segments.
Due to these restrictions, we predict that 2018 will be the year of the owner-occupier and the first-home buyer in particular.
That’s because first-timers will be eager to take advantage of the generous first-home owner stamp duty concessions also announced in 2017.
APRA ups pressure on banks to rein in investor lending with tighter regulations on interest-only loans. https://t.co/NG0nW4e1j8
— Business Review (@aus_business) March 30, 2017
2. Population growth will continue to drive housing demand
Last year, Australia’s population grew by 388,100 according to the Australian Bureau of Statistics, and Victoria was the nation’s fastest growing state, with a population increase of 2.4 per cent.
2018 is when we’re really going to see evidence of this all across Melbourne – from new transport routes and public works to residential developments and the general expansion of the CBD.
Where will all this growth occur? All signs point to the north.
The City of Melbourne has announced a number of major public works in the northern section of the CBD, including the City North Structure Plan, the Docklands Public Realm Plan and the Queen Victoria Market Precinct Renewal.
ICYMI: The National Trust has announced its support for Queen Victoria Market Precinct Renewal. https://t.co/tZErMIBYIo
— City of Melbourne (@cityofmelbourne) August 31, 2017
Melbourne’s already booming northern suburbs will become even more lucrative places to own property as their proximity to the city centre grows closer.
3. Investors will improve their strategy
If 2018 is the year of the owner-occupier, does that mean it will also be the year investors sit on the sidelines?
Not necessarily. Sure, there will be fewer lending options, but that doesn’t mean investors need to wait until APRA loosens their grip. Instead, they’ll need to get more strategic during the slower growth period.
There are always great opportunities to buy, particularly in Melbourne’s northern suburbs. In our opinion, houses and townhouses will be rewarding investments in 2018, particularly as areas south of the CBD become increasingly dominated by high rise titled residences.
For most investors, working closely with a property manager will be key this year. They can help you decide on the best performing options for your portfolio.
Already thinking of what the new year has in store for you? Reach out or drop into one of our offices to chat to a Nelson Alexander team member today. We’re glad to talk to you about our predictions and your’s, as well as your property goals for 2018.