Australian Property Market Outlook October 2019

The
outlook for Australian property prices is improving.

Prices are rising, and home buyers are flocking back into the market. لفة المتعة First home buyers in particular are rushing to snap up bargains ahead of further expected price increases.

Consecutive
interest rate cuts by the Reserve Bank of Australia in June and July, and the
relaxation of rules on how lenders assess borrowing capacity, have lifted home
buyer sentiment, says the Macquarie Property Insights
Report – September 2019.

And
almost three in four first home buyers believe that now is a good time to buy
because current low prices won’t last. As a result, they are planning to get
into the property market as soon as possible, the Genworth First Home Buyer Sentiment Report for September reveals.

Sydney
property prices rising

Sydney’s
residential property market is the biggest in Australia, and it sets the trend
for the rest of the nation. After two years of flat or falling home values,
Sydney house prices are now on the rise again as buyer activity picks up.

Sydney
home values are still more than 10% below
their 2017 peak, but CoreLogic’s latest monthly home value index shows Sydney property prices have now risen for the past
three months in a row, most recently by 1.6% in August.

Premium
Sydney suburbs are leading the way with some very steep price rises. For
example property prices in Vaucluse were up 24 per cent in
the 12 months to August.

Genworth
says nearly a quarter (22.2%) of all Australians looking to purchase their
first home are targeting the Sydney market, and over 75% of them believe that
now is a good time to buy.

As a
result of this renewed optimism in the Sydney property market, recent auction
clearance rates have been high. They have remained above 70 per cent during September, reaching
over 80 per cent in some suburbs.

And
the strength in Sydney house prices looks set to be sustained for the
foreseeable future.

QBE
and BIS Oxford Economics predict Sydney house prices will grow nearly 6 per cent between 2019 and
2022, because building approvals are low and there will likely be an
undersupply of Sydney homes in a few years.

Melbourne
property prices rising

The
Melbourne property market is dominated by auctions, with apartments a
significant part of the outlook in the Victorian capital.

As in
Sydney, Melbourne property prices are on the rise again. Although Melbourne
residential property values are down 6.2% for the past year, they jumped 1. اسرار لعبة الضومنة 4%
for the month of August.

This
was the third month in a row of gains for home prices for the city, confirming
that the last mini-downturn in Melbourne property prices is now well and truly
over.

CoreLogic
reports that Melbourne’s auction clearance rates have been climbing and are
much higher than they were last year.

For
example for the second week of September, Melbourne saw an auction clearance
rate of over 75%, compared to just 53.8%
for the same week in 2018.

However
only 1,020 auctions went to auction, compared to 1,161 homes for the same
period in 2018. This suggests Melbourne homeowners are expecting prices to keep
rising through spring and summer.

Melbourne is one of the fastest-growing cities in the developed world, and it is forecast to overtake Sydney to become Australia largest city by 2026. This strong demand for new housing will sustain Melbourne property prices for many years to come.

Are
national property prices going up or down?

Property
prices across Australia are going up, with national house prices rising 0.6%
for the quarter and 0.8% for the month according to CoreLogic’s monthly house
price index.

Outside
of Sydney and Melbourne, some parts of the nation are still experiencing weaker
property markets. But Macquarie’s senior economist Justin Fabo says it is quite
normal for Australia’s two biggest cities to lead the way, and he expects to
see prices in other capital cities follow suit.

“Typically,
what happens when Sydney and Melbourne markets experience price growth, the
other capital city markets react with a lag,” says Fabo.

Macquarie’s
view is that national house prices will rise at least 5% by the end of 2020,
driven largely by growth of around 10% in Sydney and Melbourne, and Fabo said
house prices could go even higher than that.

“If
auction clearance rates maintain the levels we’ve seen, we would expect the
pace of price growth to continue at about a per cent a month, which would
translate into 12% growth over the next year. That’s fast, but it’s not out of
the question, given the outlook for interest rates and the change we’ve seen
already in sentiment,” he said.

ME Bank reports that house price expectations have become more positive across the country but especially in Tasmania and Queensland, where significantly more people are predicting prices will start heading up again. ألعاب كازينو

First
home buyers to buoy the market

The
Australian residential mortgage lending market was worth $359 billion in 2018,
or almost $1 billion a day.

Today,
first home buyers make up 30% of this market, which is far below the 42% they
accounted for in 2009.

This
low level of first home buyer participation in the property market in recent
years has been caused by rapidly rising house prices that saw many being
‘priced out of the market’, particularly in Sydney and Melbourne.

However
that trend is now reversing, and first home buyers are back with a renewed
sense of optimism and determination to buy before property prices soar too high
again.

As
they return to the market in larger numbers, they will buoy the entire market.

Genworth
says almost three in four would-be first home buyers nationwide believe that
now is ‘a good time to buy’, with one in two citing recent ‘falling property
prices’ as the primary reason.

Among
Melbourne and Sydney based first home buyers, a stronger majority (75.1% and
73.6% respectively) say that now is a good time to buy.

Interestingly,
Perth-based first home buyers are the most optimistic, with 82.0% believing
that now is a good time to buy.

Genworth
found that among first home buyers, the traditional Australian dream of buying
a free-standing home to grow old in is being increasingly replaced with a more
pragmatic approach.

Determined
to get into the market as soon as possible, almost one in three (32.3%)
prospective first home buyers are looking to buy an “entry level” property and
then upgrade within five years.

Investment
properties are also gaining in popularity. One in six (15.5%) first home buyers
report that they are planning to enter the market by way of an investment
property purchase.

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