Reflections on this year’s property market and what you can expect in 2018
As 2017 draws to a close, I believe there’s no better time to reflect on this year’s property market and consider what we can expect from the year ahead.
Many predicted that 2017 wouldn’t have the growth we experienced in previous years, yet we have seen it continue to grow at a strong and steady rate. Now the question everyone wants answered is whether or not this growth rate can continue in years to come.
A number of factors point towards a plateau, and after many years of growth, I expect we will finally see the bubble burst and the market begin to correct itself. While 2018 is ramping up as an important year for the property market, there have been some significant events that have occurred throughout 2017, and after 20 years of experience in the industry, I believe it’s vital to reflect on the year that’s passed before we start to look to the future.
2017 REFLECTIONS
Migrant growth continues
Australia remains a popular destination for migrant growth, and we’ve seen the price of houses in certain suburbs grow astronomically as a result. The influx of newcomers has helped push prices up dramatically, and for this reason, capital growth has gone through the roof. Some areas have even experienced capital growth rate as high as 25 per cent – which is almost unheard of.
However, with the government set to bring in stricter international lending conditions which will result in interest rates increasing, and these two factors will facilitate the plateau of capital growth in 2018.
Remote working conditions
I’m seeing more and more people take advantage of technology, and with respect to the workforce this has meant an increase in the uptake of companies offering remote working conditions to employees, allowing them to work from home far more than ever before. For many people, this has enabled them to move further away from the CBD, into outer suburbs where they can get more ‘bang for their buck’ with respect to their homes.
An increase in flat-fee agents
A whole host of flat-fee agents like Purple Bricks have flooded the market, offering property sales packages for one singular fee rather than a traditional percentage of the sales price. While a few of these agencies started to gain some great traction early on, these business models effectively remove all agent incentives to go above and beyond, and this has resulted in vendors receiving sub-par results.
2018 PREDICTIONS
It’s the era of the “super-agent”
The market is set to be a lot less buoyant in 2018, which means that agents are going to have to work twice as hard to ensure their success. Following on from my last point, it seems likely that the era of the ‘sub-standard agent’ will come to an end. I believe 2018 will be all about the ‘super agents’ – the talented, skilled and experienced agents who want to be proud of the brand they’re aligned with.
Ultimately, I see flat-fee agencies as the Bi-Los of the industry, with these cheap brands only attracting below-average agents and producing sub-standard results which will ensure their swift demise in a tightening and very transparent market.
