Episode Details

If you're curious about what will be affecting the property markets for 2018, you will love today's show, because I discuss 8 trends that will affect the property markets for 2018.

I'm also going to teach you one of the important laws of success which is the Law of Accumulation.

After 5 years of soaring property prices the forecast for our capital city housing markets remains mixed for 2018, with property values likely to finish the year higher than they started, but growth will occur at a slower pace.

The fact is, 2107 produced stronger average house price rises than many commentators predicted, however there are now signs that we've moved into the next phase of the property cycle as house price growth stabilises, auction clearance rate have dropped and lending to investors has slowed.

Looking forward, here are 8 trends that could shape our property markets in 2018…

• Price Growth to Moderate - The phenomenal price growth experienced by Sydney and Melbourne over the last 5 years has come to an end. What will happen to property values next year will depend in what the RBA does to interest rates and if APRA tightens the screws on lending further. Having said that…

• Interest rate will remain unchanged - The official RBA interest rate is likely to remain at 1.5% throughout 2018.

Australia's economy is still operating below its potential with economic growth not strong enough to justify an interest rate increase. The positive signs of jobs creation, falling unemployment and rises in full-time employment are being offset by slow wages growth, sluggish retail sales and a benign inflationary environment. Fortunately, the RBA will be pleased our property markets are cooling and will not feel the need to use rising rates to slow the market.

• APRA is unlikely to tighten its macro prudential measures - APRA is getting its way…. Under its watch stricter bank lending criteria have created a "credit squeeze" which has stifled the Sydney and Melbourne property booms. But this time round the slowdown has occurred in a low interest rate environment meaning our banks are in a healthy financial position and loan defaults are at a minimum. This means it is unlikely that APRA will need to tighten the screws further, but on the other hand it is too early for APRA to relax its guidelines.

• Jobs growth will continue - More than 335,000 jobs were created in the past 12 months, the majority in full-time work. And Australia's golden run of jobs growth is likely to continue to underpin our economic growth.

• Strong population growth will continue - Our strong population growth will also underpin our property markets. Last year, Australia's population grew by 389,100 people to reach 24.5 million by the end of March 2017. Demand for housing has averaged about 164,000 dwellings per year over the last 5 years and according to the ABS in the five years to 2021, continued strong population growth (underpinned by net migration of 240,000 per annum), plus some shifts in household composition (more one and two person households), means we're likely to grow by 172,000 households a year – a 5% increase in demand. Over the last year Victoria was the fastest growing state with a population increase of 2.4% and this soaked up much of the anticipated oversupply of new apartments in Melbourne.Net overseas migration accounted for 60 per cent of Australia's total population growth as we added 231,900 people to the population. Overseas migration was the major contributor to population change in New South Wales, Victoria, South Australia and Tasmania, whilst natural increase was the major contributor in all other states and territories.

• Brisbane will finally get its turn in the sun - If interest rates remain unchanged, APRA don't impose further lending restrictions and our economic growth remains steady, i