{"id":6658,"date":"2015-12-15T01:00:38","date_gmt":"2015-12-14T14:00:38","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6658"},"modified":"2015-12-15T01:00:38","modified_gmt":"2015-12-14T14:00:38","slug":"2016-hotspots","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/2016-hotspots\/","title":{"rendered":"2016 Hotspots – Michael Yardney"},"content":{"rendered":"

 
\nIn putting the show together for this week, I asked Michael Yardney<\/a><\/strong>,\u00a0from Metropole Property Strategists, if he could detail what he thinks are going to be the property \u201chotspots\u201d in 2016. Those who work with Michael, will know his response to that question. Not quite what I expected and you might be surprised as well.
\n <\/p>\n

Transcript:<\/h4>\n

Kevin<\/b>:\u00a0 Always around this time of year, many people want to know what\u2019s going to happen next year. As we head into 2016, a good topic \u2013 and it\u2019s a topic we\u2019re asked to address \u2013 is about hot spots. We\u2019ve got a particular feeling about that. Michael Yardney from Metropole Property Strategists joins me.
\nHi, Michael.
\nMichael<\/b>:\u00a0 Hello, Kevin.
\nKevin<\/b>:\u00a0 Do they exist, firstly?
\nMichael<\/b>:\u00a0 Well, Kevin, every year people try and find the hot spots for the next year. You\u2019re right. Around this time of the year, you\u2019ll see lots of articles about that.
\nI found it interesting looking back at some of the previous ones online and in the magazines, and those areas that were so-called hot spots have actually performed pretty poorly over the last little while. Many of the outer suburbs, the regional suburbs, the mining towns, which were flavor of the month for a short time, were not hot spots at all.
\nMaybe we should look at what is<\/i> likely to drive our property markets over the next year.
\nKevin<\/b>:\u00a0 Interesting. I was talking to Dr. Andrew Wilson from Domain about this just recently, and his comment was that by the time it\u2019s identified as a hot spot, it\u2019s already finished. It\u2019s over. It\u2019s gone.
\nMichael<\/b>:\u00a0 Well, it\u2019s all so short-lived. What I think investors should be looking at is more long term. Yes, I know the concept that it would be nice to time the market, but I\u2019ve found it\u2019s harder and harder to do at the moment. There are too many factors.
\nKevin<\/b>:\u00a0 What are those property markets going to look like, and what\u2019s going to drive them next year?
\nMichael<\/b>:\u00a0 I think the drivers next year are going to be Australia\u2019s economy. That\u2019s slowing, and how that pans out and how the Reserve Bank is going to respond with interest rates will clearly be a major impact on our property markets.
\nAnother big factor over the next 12 months is APRA\u2019s regulation targeting investors and now even more recently owner-occupiers. This is going to slow demand down. Particularly for investors who are marginal and having difficulty getting loans, or investors with very large property portfolios who are rent-reliant, they\u2019re going to have more difficulty getting finance, and I think that\u2019s going to slow the market down a bit next year.
\nKevin<\/b>:\u00a0 Population?
\nMichael<\/b>:\u00a0 Population growth was one of the big drivers. You\u2019re right, Kevin. But that\u2019s slowing a little bit, and where it\u2019s going to is mainly going to be the two big capital cities, Melbourne and Sydney, where growth in service industries is creating the biggest jobs.
\nInterest rates are going to be an interesting factor. I think they\u2019re going to remain low. If you put me in a corner and said, \u201cWhat\u2019s going to happen?\u201d I\u2019d say, \u201cThey\u2019re probably going to drop once or twice more over the next year because our economy is faltering a bit.\u201d
\nKevin<\/b>:\u00a0 It\u2019s one thing to have lower interest rates by the RBA, but it\u2019s just a matter of whether the banks pass it on, Michael.
\nMichael<\/b>:\u00a0 Exactly right. I think we\u2019re going to get a two-tier system where businesses are going to be getting the lower interest rates but the banks and home-owners are not as much. But that\u2019s interestingly leading to business confidence. They\u2019re feeling more confident now that we seem to have a stable federal government and stable state governments, and business confidence translates to more investment, to more jobs.
\nThat\u2019s also creating consumer confidence. Consumer confidence is the highest since Malcolm Turnbull was elected. In fact, it\u2019s the highest it\u2019s been in two years recently, so consumers are happy because they\u2019re getting more jobs because unemployment is under control.
\nI think the combination of these factors means 2016 won\u2019t be as good for house price growth as 2015 was, but we\u2019re not going into reverse. We\u2019re not going backwards. The strong Melbourne and Sydney markets have probably dropped from fifth gear to third or fourth gear, Kevin.
\nKevin<\/b>:\u00a0 Interesting. So steady as she goes, 2016, Michael?
\nMichael<\/b>:\u00a0 Probably a little bit slower than it went last year. It also means that you\u2019re going to have to be very careful with property selection, because capital growth isn\u2019t going to cover up mistakes.
\nI think, as always, it\u2019s really going to be demographics \u2013 how we live, where we want to live. The sort of people who have got a bit more\u00a0 income are the ones that are going to push up property values, because I see as our economy is bumbling along, there\u2019s going to be very little wages growth in many of the manufacturing and blue-collar areas. I think the high end of the market is probably also going to suffer a little bit, Kevin, because you don\u2019t need those big trophy homes in Sydney, and Melbourne, and Brisbane when the economy is faltering a bit.
\nBut there are lots of people who are still getting married, getting divorced, having babies \u2013 maybe not in that order, Kevin \u2013 and what\u2019s going to end up happening is they\u2019ve still got to live somewhere. They\u2019re still going to move. They still have jobs, and they\u2019re still buying or renting properties, Kevin.
\nKevin<\/b>:\u00a0 Always good talking to you, Michael Yardney from Metropole Property Strategists. Michael, thank you for your time.
\nMichael<\/b>:\u00a0 My pleasure, Kevin.
\nKevin<\/b>:\u00a0 Don\u2019t forget you can get a copy of Michael\u2019s new book, too. There\u2019s a link on our homepage at RealEstateTalk.com.au.
\nMichael, we\u2019ll talk to you again next week. Thank you.
\nMichael<\/b>:\u00a0 My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  In putting the show together for this week, I asked Michael Yardney,\u00a0from Metropole Property Strategists, if he could detail what he thinks are going to be the property \u201chotspots\u201d in 2016. Those who work with Michael, will know his response to that question. Not…<\/p>\n","protected":false},"author":176692471,"featured_media":6157,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,10,11,13,17,25,27],"tags":[101],"class_list":["post-6658","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"\n2016 Hotspots - Michael Yardney - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/2016-hotspots\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2016 Hotspots - Michael Yardney - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  In putting the show together for this week, I asked Michael Yardney,\u00a0from Metropole Property Strategists, if he could detail what he thinks are going to be the property \u201chotspots\u201d in 2016. 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