Across the country, property value growth is continuing to level out and although this may seem like a negative thing for homeowners, it may be a positive thing for the Australian market. A market experiencing moderate growth can often result in a healthier long-term market.

Looking back on 2017, national dwelling values were 4.2% higher over the calendar year according to CoreLogic – which is a slower pace of growth relative to 2016 when national dwelling values rose 5.8% and in 2015, when values nationally were 9.2% higher.

The CoreLogic December Hedonic Home Value Index results reported that national dwelling values slipped lower over the month, led by falls across Sydney, Darwin, Melbourne and Perth.

The most significant declines were seen in Sydney and Darwin where dwelling values were down 0.9% in both markets. 

International market conditions will likely continue to influence Australian market conditions, particularly the US and Asian markets. As the US property market is on the move, it may help support the Australian market and keep it balanced.

Vendors should ensure their expectations are realistic this year, and their property goals are in line with cooler conditions. Vendor discounting is a likely prospect for those selling property in Sydney and Melbourne markets, however, this may level out in the second half of the year. 

Engaging with an experienced real estate agent can help vendors set a realistic market price of their property as they can take advantage of an agent’s on-ground knowledge of the area and involvement in recent transactions. Not only this, a good agent may prove invaluable should the need for discounting arise, helping to navigate the negotiation process between buyer and seller which is often emotional and taxing.

Vendor discounting may help to improve housing affordability in some parts. Buyers may be placed in a better position to negotiate a favourable price compared to previous years. 

Apartment settlements may be placed under valuation pressure in markets across the country, with the Brisbane apartment market and outlying areas of Sydney and Melbourne especially affected.

The Brisbane apartment market may be a key market to watch for first home buyers. New supply combined with first home buyer’s incentives may see unique and affordable buying opportunities present. 

I believe Perth will also remain a market to keep an eye on this year. The market is showing signs that it has moved through its worst, as vacancy rates have fallen and there are lower levels of stock compared to previous years. 

At the end of last year, Perth saw its first rolling quarterly capital gain since late 2014 with CoreLogic reporting a 0.3% lift in dwelling values over the three months to November 2017. They also reported that settled sales are rising (+3.8% year on year) and homes are selling faster (59 days compared with 68 days a year ago).

There may be many good opportunities to purchase Perth property in the coming months and to benefit of any upside in prices.

Lastly, amidst some of the ‘doom and gloom’ talk surrounding a levelling market, I encourage Australians to consider the demonstrated value of property as a safe and profitable investment over the long term.

CoreLogic’s latest Pain & Gain Report showed the total gross value of properties resold at a profit over the September 2017 quarter was $17.7 billion, far outweighing resales losses which amounted to $453.8 million.

This also attests to the underlying demand for property that is still there in many markets and that will likely remain over the course of the year despite signs of moderating price growth.