Again this week, we will back track and hear what some of our experts had to say at this time last year about what was ahead. Chris Gray predicted that the major markets would continue to improve – correct – but was he surprised about what happened in Sydney?

Jan Somers – another one of our experts whose opinion we sought this time last year is saying that this year will be much the same as what she said about 2016.

The proportion of Aussies who own their own homes is falling, creating a chasm of wealth between the housing "haves" and the housing "have nots". Michael Yardney from Metropole Property Strategists has been watching this closely and he has some advice for would be investors and indeed for young first time buyers as well.

Last year when Pete Wargent took out his crystal ball, he said to ‘expect the unexpected’.  Also he highlighted the impact international students would have. He was spot on – so what has he got to say about 2017?

When we asked John Lindeman this time last year what he thought was ahead for 2016, he predicted that Sydney would slow down and we would see a more defined 2 market situation.  So, how has he reacted to that?

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Transcripts:
More unexpected situations on the way - Pete Wargent
Kevin:  As you’re probably aware, about this time last year, I spoke to a number of our guests and asked them what they thought about 2016, what we’d be saying about the year. One of those was Pete Wargent, who joins me once again. This time, he’s in the U.K.

Good day, Pete. Thanks for giving us your time again.

Pete:  Hi, Kevin.

Kevin:  Just to remind you, this is what you said this time last year.

Pete:  I think during some of this year’s exuberance, I believe a significant number of investors would have bought off-the-plan properties with only small deposits to hand. So, I think 2016 could be a year when APRA’s tightening measures towards the investor lending could pose problems for some of those off-the-plan buyers who’ll end up with a deposit shortfall at settlement. So, there could be some fallout from that.

I think that 2016 will also be the year the media latches on that going forward it will be the immigration of international students rather than arrivals on 457 visas that is actually driving Australia’s immigration and population growth. Enrolments and grants for students are starting to ratchet up, so with hundreds of thousands of student arrivals over the next few years, mainly headed to Sydney and Melbourne, that’s going to create a lot of demand for rental property close to the city centers, just at the same time that APRA is hosing down the investor sector.

Finally, I think 2016 could be a year to expect the unexpected. A lot of market commentary revolves around the notion that this can’t happen or that can’t happen. Well, I’ve been in Britain this month, and a lot of things that weren’t supposed to happen have happened, particularly in the investor space.

Back in Australia, we’ve seen APRA introduce macro-prudential measures this year, and I wouldn’t be surprised if there are more tweaks in 2016 in the wake of [1:40 inaudible] resulting in tighter capital requirements and lower loan-to-value ratios. So, in terms of what this means for investors in 2016, they’re likely to require substantial deposits.

Kevin:  Pete, I think of all the people I’m talking to in this program, you were pretty well spot on with a number of your predictions. A number of people did talk about APRA. How big of an impact was that on the market during the year?