2017 – What Can You Expect in the Housing Market?

Eriks Draiska
Published on December 20, 2016

2017 – What Can You Expect in the Housing Market?

What Can You Expect in the 2017 Housing Market?

With the new year knocking on the door, one of the questions I hear most frequently is where I think the real estate market is headed in 2017.

Sellers, want to know if the market will morph into one a more favourable to their interests. Buyers, of course, want it to go their way.

Ah, if only I had a crystal ball and could cut right to the chase to tell you what’s going to happen in the 2017 real estate market.

Since we don’t have a handy tool to help us discern the future, we rely on experts in various economic niches for our housing market indicators every year. Are they, always right? Nope, but they do get awfully close.

Personally, I combine what I learn from the economic forecasts with my experience every day as a boots-on-the-ground real estate professional and available indicators as well as statistics.

So, let’s dive in.

Interest rates

As you know, the Banks raised their interest rates a short while ago. While it was a small increase they did indicate to expect a couple more rate hikes in 2017.

So, how does this affect the real estate consumer?

Yes, those with an adjustable rate mortgage will take a hit, as will homeowners with an adjustable rate home equity line of credit.

If you’re planning on purchasing a home, on the other hand, and need a mortgage, while the Banks’ move should encourage you to act more quickly than you’d planned, don’t let it scare you off completely.

Even with the interest rate hike in December, mortgage rates are still at historic lows right now, so jump into the market and get that dream home.

If the Banks make good on the promise of additional interest rate hikes, homebuyers on tight budgets that choose to wait later in 2017 to buy a home may find themselves knocked out of the market. Even a half a percent increase on a 30-year fixed $250,000 mortgage could increase the annual payment more than $850 according to Fortune.com’s Kerry Close.

Put another way, if mortgage interest rates go from say 4 percent to 4.25 percent, many potential homebuyers could be leaving the buyer pool.

Locking in a fixed-rate may be the answer. Check with your finance expert or call for us to put you in touch with one.

The good news, however, is that “There’s a lot that buyers can do to mitigate the effects of rising rates, including looking for lower-priced homes, putting in a bigger deposit or changing term lengths on a mortgage’s fixed-rate component,” says Jonathan Smoke, chief economist at realtor.com.

How about prices in the 2017 Housing Market?

That’s the burning question for folks who plan on buying a home down the road. By the end of November 2016, the median sales price of Australian homes and change in values from last year were:

City Change in Value Median Dwelling Price
Adelaide 4.7% $420,000
Brisbane 8.4% $485,000
Canberra 8.4% $590,000
Darwin 1.1% $480,000
Hobart 14.4% $336,000
Melbourne 14.7% $623.000
Sydney 16.7% $845,000
Perth 0.4% $490,000


After four and a half years of strong value growth, Mr Lawless from Core Logic – RP Data, said it’s hard to imagine a reacceleration in property values could be long lived.

So, as long as the aforementioned interest rates stay put, there’s a bit of good news for you if you need to wait until later in the year to purchase.

If you’re planning on upsizing, fortune.com’s Close says you’re sitting in the sweet spot.

Small home prices are expected to rise faster than larger ones and city dwellers can expect more home value appreciation than those in the outlying metro regions. In other words, expect your small home to be the belle of the neighbourhood real estate market when it’s listed.

Which leaves first-time buyers and those who hope to downsize in a not-so-sweet spot. Expect lots of competition from other buyers for these smaller homes in the lower price ranges. In fact, prepare for it by cementing your financing and being ready to submit an offer immediately.

We can help you with the preparation part – feel free to give us a call.

It appears, as though the low yield profile is no deterrent to investors, with ABS housing finance data showing a consistent rise in finance commitments for investment purposes since May this year, according to RP Data report.

That elusive inventory problem

According to Mr Lawless, despite higher listing numbers at a combined capitals level, the hottest markets are still showing listing numbers lower than a year ago. Sydney listings are 9.4% lower than last year, while advertised stock levels in Melbourne are 2.9% lower. Hobart listings have fallen sharply compared with last year, to be 29% lower, whilst Canberra stock is 7.6% lower than a year ago. Adelaide’s available property listings are lower also.

However, “With the unit supply pipeline remaining substantial, we expect to see a continuation of weaker market conditions across those unit markets where high supply levels are dampening the prospects for higher value growth,” Mr Lawless said

A lot of it boils down to “it all depends on . . .”

The housing market’s strength depends on a number of variables, one of the most important of which is the health of the job market.

Although it’s better than it was during the recession, and although State and Federal Governments, promising to ramp it up, hiring is still not quite where anyone would like to see it.

This is something that Reserve Bank policy makers hopefully will look at when deciding whether or not to raise official rates again.

There is a lot to consider as you think about your future home-buying or selling prospects but, really, there’s nothing you can do about the economy that will impact the housing market.

If you’re selling make sure your place is the best it can be in the current market and make it more attractive to buyers. Here 5 Ways to Make it More Attractive.

My best advice to you is to jump in as soon as you can.

To find out more, you’re welcome to call 08 83961100 to arrange a chat with people that care.
Alternatively, Book a Free Consultation or Get Your Home Value Here.
Feel free to browse the rest of our Blog for more tips tricks and helpful info you can use.
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Regards Eriks & Team Plaza Real Estate 

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