2019 was a wild year for the Australian property market. After experiencing two years of house price declines, the market finally found its floor in June (according to CoreLogic data) and has been seeing a steady lift in house prices since.

But will the market continue to sizzle its way through the rest of this year, and should we prepare for more boom times?

Prices to continue to bounce back

SQM Research’s annual Housing Boom and Bust Report predicts that most Australian capital cities will see price increases in 2020, spurred on by low interest rates and relaxed credit conditions.

SQM’s base case forecast is for dwelling prices to rise between 7 and 11 per cent. Sydney and Melbourne will be leading the charge with Sydney property prices expected to go up between 10 to 14 per cent, and Melbourne property prices to go up by 11 to 15 per cent next year.

There’s a chance that house prices could rise higher still if interest rates continue to fall, however less significant increases are also a possibility, particularly if the APRA decides to intervene or if there are unfavourable economic conditions such as international trade tensions.

Affordability may become an issue again

With property prices looking set to make a full recovery in 2020, affordability is going to be a concern.

For those in a position to buy a property it may be best to get into the property market sooner rather than later.

Property prices are currently as affordable as they are likely to be for a while, so it’s a good opportunity to get into the market, particularly while interest rates are low too.

For first homebuyers concerned about price increases it may be worth checking to see if you’re eligible for the federal government’s First Home Owners Grant Scheme or for state government grants or concessions that can help you get your foot on the property ladder sooner.

Should you pick an ideal location over a dream house?

Everybody has different priorities when it comes to house hunting. For some homebuyers, location trumps all else – they would happily live in a small or rundown property if it means they can live in their favourite area.

For others, it’s the quality of the property that wins out, even if it’s located in an average suburb.

Of course both are crucial factors, but should you be paying more attention to the perfect location or to the property itself?

Location, location, location!

There’s no denying that the neighbourhood a property is located in is one of the most important decisions you will make about it, after all it’s the first thing you search for when searching for a property online.

You can make changes to a property once you have purchased it if you aren’t completely happy with it, but you can never change where it is located.

Location should be top of mind for homebuyers that want to get into particular school zones, are looking for a short work commute, want to be near certain amenities, or are looking for an area with strong capital growth.

When to prioritise the house?

Location is just one part of the property equation. Everybody’s situation is different and depending on lifestyle, family and work commitments a person might not need to live in any one particular locality.

Those who travel a lot for work for example may prefer a location that is further away from major hubs where it is peaceful and quiet. There are also a lot of families that are happy to live in a cheaper neighbourhood if it means they can have a large home with all of the modern conveniences they need.

A compromise

Even if location is important to you, you may be reluctant to purchase in a prestige area if it means you have to spend a million bucks on a rundown shack.

Many homebuyers end up finding a balance between location and property quality. You may need to take a look at the sister suburbs of your favourite area to find a property that suits your needs.

Cast as wide a property net as you can to give yourself more options. Even if location is your number one priority, there are a lot of good neighbourhoods around, and you might find that your dream home is located just a few suburbs away from where you initially started your property search.