What will 2019 hold for the property market? We look at some of the biggest trends in property investment we’re likely to see in the year ahead.
Investors seeking regional areas over metropolitan
As property price growth continues to slow in Melbourne, there’s an increasing demand for regional properties by investors thanks to more affordable housing opportunities.
According to CoreLogic’s Home Property Value Index for February 2019, the national median house price value slipped a further 0.9%. In contrast, regional housing market values are up 2.4% overall.
Despite the downturn in Australia’s two largest cities, there are still plenty of opportunities for investors who are prepared to focus on fundamentals and to purchase well at a time when there’s fewer buyers to compete with.
Regional areas are often overlooked and offer a mix of lifestyle appeal, affordable price points, access to amenities and transport options linking with major working precincts.
Units will outperform houses
Nationally, unit prices are expected to do better than house prices in the coming years. According to the February 2019 NAB Australian Housing Market Update, a 2-3% growth over the next two years is forecasted.
While most capital cities, like Melbourne, are anticipated to be inundated with unit developments in the coming years this could possibly drive prices further down. Also, new stamp duty concessions in Melbourne may help to balance this out and boost unit property values.
However, unit prices proved more resilient than detached house values in 2018 with national median house prices falling 6% in 2018, while units fell just 3% and this trend looks set to continue in 2019.
Following the current trend, unit prices are predicted to be flat to positive across every capital city in 2019. Nationally, unit prices are tipped to edge up by 2% in 2019 before growing a further 3% in 2020.
Great buying opportunities for investors looking at new properties
Amendments to legislation which came into effect on the 1st July 2017, restricting some tax depreciation deductions that can be claimed for older investment properties, factored into this particular trend.
Brand-new properties, which were unaffected by legislation changes passed to plant and equipment (division 40) depreciation in 2017, have resulted in property investors targeting new builds to optimise their cash flow and maximise tax deductions.
For these new properties, BMT Tax Depreciation found investors an average of $12,268 first year depreciation deductions in 2017/2018.
If you’re buying a new or second-hand property in 2019, it’s more important than ever to keep an eye on market trends and property news to stay up-to-date with the latest developments affecting the current Australian property market.
If you’re investing in property, there are 9 experts you should include on your investment team. Click here to find out who they are.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Bradley joined BMT in 1998 and as such he has substantial knowledge about property investment supported by expertise in property depreciation and the construction industry. Bradley is a regular keynote speaker and presenter covering depreciation services on television, radio, at conferences and exhibitions Australia-wide. Please contact 1300 728 726 or visit www.bmtqs.com.au.