FOR those seeking affordable housing …
Is it the case that governments all around Australia are not the least bit interested in doing anything about affordable housing?
IS this because …
-the incentives are not there
-the rise in property prices boosts their bottom line, more stamp duty is payable, the higher rates become and so on
-they really don’t care if our domestic housing is bought by foreigners … it’s all about the bottom line
House price rises spread beyond Sydney and Melbourne, but pace of growth slows
By business reporter Michael Janda
PHOTO: Home prices rose in every Australian capital city in January. (ABC News: Liz Pickering)
RELATED STORY: A window briefly opened for first home buyers, but now it’s slamming shut again
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Australian house prices continued to rise in January, with increases spreading beyond the booming Sydney and Melbourne markets.
Key points:
- Capital city house prices rose an average of 0.9pc in January, while in regional areas they climbed 0.7pc
- Melbourne had the biggest rise of 1.2pc, followed by Sydney’s 1.1pc increase
- CoreLogic’s Tim Lawless says there are signs growth rates are coming down as more homes are listed for sale
The big south-eastern cities continued to lead price rises, but all other capitals posted gains, including modest 0.1 per cent increases for the struggling Perth and Darwin markets.
However, the top 10 capital-city price increases were in areas of Sydney and Melbourne, while six of the 10 biggest falls were in Perth and its surrounds.
Regional Tasmania had the three strongest areas for price growth outside the capitals, while outback Queensland and WA led regional declines.
Overall, CoreLogic’s figures show the pace of growth has slowed from peaks during the spring selling season, with capital city prices rising 0.9 per cent on average, while regional markets typically posted a 0.7 per cent increase.
“Factoring in the seasonal effect, the latest results indicate a reduction in the speed of growth across most markets, especially for Sydney and Melbourne where affordability constraints are once again becoming more pressing,” CoreLogic’s head of research Tim Lawless said.
“We were seeing values rising by nearly 3 per cent back in November month-on-month in Sydney.
“That growth rate is now reduced down to 1.1 per cent, and Melbourne’s reduced from a peak monthly rate of 2.3 per cent in October down to 1.2 per cent in January.EMBED: CoreLogic home price index January 2020
“So I think we are seeing the effects of worsening housing affordability and maybe some early signs that higher stock levels on the market are starting to dampen this very high rate of capital gain.”
Price rises expected to moderate as the year goes on
Mr Lawless expects that weaker trend in price growth to continue as an increasing number of property owners take advantage of a rising market to sell.
“Our expectation is that through the March quarter we probably will see listing numbers rising much more substantially as we see home owners taking advantage of what have been quite strong selling conditions,” he told ABC News.
Are real estate agents underquoting?
Properties in Melbourne and Sydney are selling for $100,000 to $200,000 above the advertised price.
Nationally, housing values have rebounded 6.7 per cent since reaching a low point in June last year, but they are still 2.2 per cent below the most recent peak in October 2017.
AMP Capital senior economist Diana Mousina believes the current housing market bounce has further to run, tipping Sydney and Melbourne to set new record high price levels within the next few months.
“Especially as we expect two more RBA interest rate cuts over the next six months which will fuel additional demand for housing, as the cost of borrowing falls,” she wrote in a note.
“However, after mid-year, we expect the pace of growth in home prices to slow.
“There are a number of factors which will limit home price growth (especially when compared to past housing recovery cycles) which include: higher household debt to income ratios (which are at a record high), tighter bank lending standards, more unit supply to enter into Sydney and Melbourne property markets and a weaker economic backdrop.
“We expect national home prices to increase by around 10 per cent in 2020 and further ahead for price growth to moderate to 5 per cent per annum.”
Housing rebound to roll on
One of Australia’s leading forecasters is tipping Australia’s property price rebound to continue through 2020 … unless the economy rolls over.
Rising prices combined withfalling rents mean the return for property investors in Sydney is at a record low of 3 per cent, while the yield in Melbourne is also very low at 3.2 per cent.
Nationally, rents increased by just 1.3 per cent over the past year — below inflation and wage growth, with Hobart (+5.8 per cent) the only capital where rents were increasing substantially faster than incomes.
However, CoreLogic also noted the average three-year fixed mortgage rate for investors was 3.48 per cent, meaning landlords in many Australian capitals could be making positive returns, while it may be cheaper for people in some capital cities to meet mortgage repayments than pay rent.
SOURCE: https://www.abc.net.au/news/2020-02-03/house-price-rise-spreads-beyond-sydney-melbourne/11923136
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