Welcome back to a brand new year. It’s going to be interesting to see where Australia’s property market heads in 2016. After a booming 12 months for many capitals, especially Sydney, the market came off the boil at the end of the year.
Buyer uncertainty crept in despite prices levelling off and the big banks made the rare decision to raise interest rates despite no increase in the official cash rate. There’s now speculation that the RBA might start to increase rates over the year ahead.
However, the positive news is that available information suggests that moderate expansion in the economy will continue in the face of a large decline in capital spending in the mining sector. While GDP growth has been somewhat below longer-term averages for some time, business surveys suggest a gradual improvement in conditions in non-mining sectors over the past year. This has been accompanied by stronger growth in employment and a steady rate of unemployment.
