Five Predictions for Property Markets in 2020

As far as the property market goes, 2019 was something of a mixed bag: after a subdued start, some key events saw the outlook change for developers and investors in the property market.

Three factors that delivered much-needed oxygen into the market were the easing of various APRA regulations, a surprise election result favouring the industry and a residential property market that appeared to be turning around.

In Australia, the bushfire crisis has undoubtedly been a tough curtain-raiser to open the new decade but there are still signs of optimism in the residential property market, one of the most notable being new buyers (including first home purchasers) welcomed back into the market.

As we look ahead to what the remainder of the year has in store, Development Finance Partners director Matthew Royal gave us his top five predictions for 2020.

1. Jobs and productivity boost: Some growth is likely in new employment and productivity, driven largely by a boost in infrastructure spending and investment, primarily in roads, rail, renewable energy and dams.

2. Accelerated sales: First home buyers sales rates and corresponding property values should accelerate in the first three months of 2020, thanks in large part to the Federal Government's Financial Claims Scheme. This will mostly likely have the biggest influence at the most affordable end of the newly-built residential sector of the market.

3. Affordability, accessibility will appeal: The best sales rates will be for projects that offer properties at the affordable end of the market and can also deliver good access to transport and proximity to employment.

4. Investment to flow: As issues around Brexit and international trade disputes ease, private and public investment will begin to flow back to the world economy.

5. Interest rates to rise: Inflationary pressure will come slowly back into markets as debt levels rise, leveraging increased equity. Globally, interest rates are likely to rise towards the end of 2020 as the central banks of major economies across the world will be under less competitive pressure to keep currencies at artificially low levels.

What developers should do

Developers undertaking projects funded at competitive interest rates, close to new planned infrastructure and growth areas, and provide stock in the more affordable end of the market will be well-positioned to start the new decade strongly.

Contact Development Finance Partners to discuss how DFP can help you turn your plans into reality or follow them on LinkedIn to stay up-to-date on the latest property market news and innovative property development financing models.

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