Mirror, Mirror On The Wall.......
This month I thought I would get the dreaded Crystal Ball out and make some wild unsubstantiated predictions for the Inner West property market this year.
- Interest rates will drop by 0.25 to 0.5 percent in the first half of 2015 precipitating a further increase in demand for the already under supplied market.
- This will see prices rise significantly AGAIN well in to the year until Springtime when a large number of homes will all hit the market at the same time.
- Investors will continue to buy up in the area but prices will start to plateau in the new/off the plan category by the end of the year as a large number of projects will be completed and flood the rental market.
- Yields will continue to drop as price increases continue, the supply of new apartments rises quickly and prospective tenants switch to the buying market to take advantage of the record low interest rates.
- The economy will settle down by the end of the year with a renewed impetus from the Federal Reserve Bank to push rates back up quickly now that the worst has past
-Once rates start to go back up the selling market will come to a sudden and immediate halt with a brief but extremely painful period (3-6 months) where a correction in prices anywhere in the vicinity of 2-10% will occur depending on how sought after and “affordable” the property may be.
-The pain will be shared by both owners and buyers. Owners will have to sell for significantly less than what they hoped for and could command only a brief time ago. Buyers will have to be patient as the property they wish to buy may be withdrawn form sale as the owner decides against selling as the prices have dropped suddenly throwing their future plans into disarray.
Hopefully I'm wrong in some areas and right in others.
Time will tell.