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Moody’s Predicts 2020 Boom in Australian Suburbs

Credit ratings agency Moody’s Analytics is forecasting strong property capital growth western Sydney suburbs which last year suffered double-digit price falls.

Property prices in Sydney suburbs have fallen by 11.1 per cent since hitting a peak in July 2017 according to the latest figures from real estate data group CoreLogic.

However, Moody’s expect many of the western Sydney suburbs to recover strongly in 2020, though growth could still be sluggish or even negative through 2019.

Sydney and Perth, in particular, are expected by the credit ratings agency to rebound in 2020 from a slump sparked by a crackdown on investor loans.

Moody’s is predicting property values at Baulkham Hills, in the north-west Sydney suburbs, to surge by 7.4 per cent in 2020, even though it was Australia’s fifth worst performing metropolitan market in 2018, with values slumping by 10.8 per cent.

It was also positive about Blacktown, in the west Sydney suburbs, predicting house price growth of 8.3 per cent next year, in an area where values last year plummeted by 9.1 per cent.

Parramatta, also in the western Sydney suburbs, was forecast to see property prices climb by 6.2 per cent, following a 10.7 per cent property slump in 2018.

Ryde, in Sydney’s north, was tipped to house price growth of 3.5 per cent in 2020, a modest turnaround from 13.3 per cent slump suffered last year.

While most of Sydney, apart from the north shore and the eastern suburbs, were expected to recover in 2020, Moody’s Analytics was lukewarm about Melbourne, where property prices plunged by 9.1 per cent in 2018.

Melbourne’s upmarket inner-east was Australia’s worst metropolitan housing market last year, with values tumbling by 13.4 per cent, and Moody’s expected the downside to continue, with an 11.2 per cent plunge in 2019 followed by a modest 3.6 per cent recovery in 2020.

Geelong, south-west of Melbourne, has so far avoided the property market downturn affecting much of Australia, last year enjoying real estate value increases of 8.2 per cent, and Moody’s are forecasting growth of 7.2 per cent in 2019 following by 10.1 per cent in 2020 to continue the boom.

Other suburbs expected by Moody’s to see growth in 2020 include Bendigo where a rise of 10.2 per cent is predicted, following expected growth of 5.4 per cent in 2019.

Mandurah, south of Perth, was tipped to enjoy a 7.8 per cent increase in property prices in 2020, following a 2.4 per cent drop in 2019.

The New South Wales central coast, north of Sydney, was tipped to be Australia’s best performing market in 2020 when it comes to apartments.

Moody’s Analytics forecast a 13.8 per cent increase in unit values next year, following an 8.8 per cent increase in 2019 in an area which has been immune to Sydney’s downturn, despite being only a one-hour drive away.

The Mackay and Whitsunday region in north Queensland is also expected to enjoy strong property price growth in 2020, with a 10.5 per cent increase predicted, following a 3.7 per cent rise this year.

Moody’s were less optimistic about Hobart however. The Tasmanian capital has been the stand out capital city performer in Australia over the last year with growth of 8.7 per cent. However, Moody’s said that the housing market in Hobart is ‘likely at the end of its bull run’, predicting a slowdown in growth to 2.7 per cent in 2019, followed by a 2 per cent fall in 2020.

Overseas property investors may wish to study the predictions further before investing in Australian suburbs over the next couple of years.

 

Suburbs Tipped by Moody’s to Surge in 2020

Central Coast, NSW* – 13.8% (following 8.8% increase in 2019)

Mackay-Whitsunday, Queensland – 10.5% (following 3.7% in 2019)

Bendigo, Victoria – 10.2% (following 5.4% climb in 2019)

Geelong, Victoria – 10.1% (following 7.2% rise in 2019)

Blacktown, Sydney’s west – 8.3% (following a 0.2% rise in 2019)

Mandurah, WA – 7.8% (following 2.4% decline in 2019)

Baulkham Hills, Sydney’s north-west – 7.4% (following 2.6% fall in 2019)

Parramatta, Sydney’s west – 6.2% (following 2.7% drop in 2019)

* Apartments

 

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