The Australian property market has finally settled into more sustainable levels of growth after a booming 2015, opening the door for buyer’s market conditions to emerge.
“What goes up will come down and there is unprecedented uncertainty regarding the nature and magnitude of the down cycle that will unfold over 2016/17 and 2017/18,” said Housing Industry Association chief economist Harley Dale.
According to the PRDnationwide 2016 Australian Economic and Property Report, the average median capital city house price rose 3.8 per cent in the first six months of 2016. Though the long federal election campaign and political uncertainty dampened the market, higher levels of home loan affordability and growing consumer confidence helped stoke the market.
“Home loan affordability has increased by three per cent in the last 12 months, leading to a 15 per cent rise in confidence for mortgage holders,” said PRDnationwide national research manager Diaswati Mardiasmo.
Sydney is still the strongest national six-month performer, with a median capital city house price rise of 8.3 per cent. However, it was down from an 11.8 per cent rise in the first half of 2015. Perth’s median price also fell to 1.2 per cent. Meanwhile, other cities like Melbourne, Darwin, Adelaide, Brisbane, and Hobart posted gains.
Buyers are now getting the upper hand, with owner-occupier dwelling finance commitments up 6.8 per cent while investor housing commitments dropped 11.6 per cent.
“This is good news for buyers planning to live in their property as they are facing less competition from investors. The national average vendor discount continues to remain low for houses at -5.8 per cent as well as units at -6.3 per cent,” said PRDnationwide managing director Tony Brasier. “However, this slight increase from August 2015 figures suggests buyers may be gaining some leverage in negotiations.”