The head of one of Australia’s largest real estate groups has outlined the property market trends he expects will play out this year.
LJ Hooker CEO Grant Harrod said 2016 has the potential to become “the year of the first home buyer”, with lower levels of price growth increasing affordability and new developments increasing housing options.
“The construction boom across the country over the past two years will attract the under-30s who are happy to live in high-density inner-city hubs,” he said.
“These developments positioned close to transport, universities and entertainment will become affordable options.”
Mr Harrod said changes to investor lending will create substantial first home buyer growth this year as “they will no longer be fighting over the same properties”.
“Investors who have bought off the plan will also look to be selling down, opening another option for first-time buyers,” he said.
The LJ Hooker boss noted that affordability will continue to be an issue in parts of Sydney, although price corrections in Perth and Brisbane will offer potential entry points for first home buyers in 2016.
“A downturn in the number of investors in Melbourne will also free up a surplus of stock, in particular apartments in the CBD, for young buyers,” he added.
Another trend the market is likely to see is a surge in renovating as Australians look to increase the capital in their home.
“Adding value through minor work should become increasingly popular and properties that offer scope for this are not likely to sit on the market long,” Mr Harrod said.
“People are no longer buying and staying put for 40 years, they are looking at different strategies to make money from their own piece of real estate.
“Renovations could be the edge needed when it comes to re-selling.”
An LJ Hooker market update also suggested the falling Australian dollar will see tourism and lifestyle-focused economies begin to rise.
In New South Wales, the update noted that Byron Bay, Batemans Bay, Forster and Palm Beach are set to strengthen over 2016, while in Queensland, Cairns, the Gold Coast and Noosa are likely to become hotspots, along with Victoria’s Lorne and Torquay.
Meanwhile, the Mandurah and Margaret River property markets, located in Western Australia, are predicted to grow, as is South Australia’s Victor Harbor and the Barossa, and Tasmania’s Hobart, according to the update.
[Related: Mortgage rate hikes on the cards for 2016]