Property Predictions for 2018
Firstly, the mainstream press has finally caught up with what has been obvious for a few months in Melbourne; the cycle has turned. Whilst all of the focus to date had been on Sydney, Melbourne peaked in Sept/Oct. Yes, the stats showed modest growth until November but this was more a statistical anomaly. This year should see a fairly flat market. Kind of what the Reserve Bank hoped for; the Goldilocks outcome – not too hot and not too cold.
The massive fines applied to some high profile agents (Fletchers, Hocking Stuart, Barry Plant etc.) will likely cause a significant tightening up of price quotes. The impact of this, rather than the new laws (which aren’t hard to get around), combined with the tighter market conditions will likely result in price quotes being a little more reliable as a price predictor.
Property referral agencies will likely continue to grow their market share but will probably get a lot more push back from agents this year as they hemorrhage fees. Referral companies add absolutely nothing to the benefit of sellers and actually frequently cost them thru lower results, whilst pretending there is no cost.
By taking part of the agents commission, they only refer to agents that are prepared to give away a significant part of their fees for the introduction and simply won’t work with the better agents that refuse to cooperate with this deception. With big dollars able to be earned by taking this cut, they can afford substantial advertising dollars though. Thus the constant radio and TV ads that trick sellers into thinking these companies are on their side.
Finally, first home buyers will continue to benefit from the flat conditions as they get the opportunity to take market share from investors who have had their borrowing conditions significantly tightened up by APRA bank requirements. The trap will be for those who hope that by waiting, prices will continue to fall; Newsflash: They probably won’t. Get in as soon as you can afford to do so. In the end it’s just a cycle.
