Weak year ahead for apartment market
Apartment prices are likely to fall in 2017, a forecaster has predicted.
BIS Shrapnel has predicted that median apartment prices will decline in Brisbane and Melbourne in 2017, and are likely to stay flat in Sydney, the Australian Financial Review reported. The company forecast that apartment prices will fall up to 2% in Melbourne and 3.5% in Brisbane.
According to the AFR, BIS Shrapnel has tipped Sydney unit prices to edge up by 1-2%, though areas such as Parramatta, the Hills district and some Botany Bay suburbs could see declines. BIS Shrapnel residential senior manager Angie Zigomanis said certain inner to middle-ring suburbs could see overhangs of stock.
“At first pass, the greatest risks would be in Botany Bay local government area, Ryde LGA, Canterbury LGA, Auburn LGA, Parramatta LGA, Hornsby LGA and Hills Shire LGA. However, we'd then have to overlay whether local factors, such as increased employment in Parramatta and Macquarie Park can justify the extra stock or whether the North West rail under construction will attract more occupants around the proposed stations in the Hills Shire LGA,” Zigomanis said.
Where prices do decline, Zigomanis suggested the price falls would not be catastrophic.
“It won’t be that big. Five to 10% tops. At the end of the day, Sydney is still undersupplied, but landlords will have a lot of competing stock so they would need to sharpen their pencils to attract tenants,” he said.
House prices, meanwhile, are likely to rise across all capital cities apart from Perth and Darwin, BIS Shrapnel predicted. The company said Sydney and Melbourne house prices could rise up to 4%, while Brisbane could see house prices gain 2-3%.