A new report shows a cooling housing market across Australia with strong growth in Sydney the exception. The Bendigo Bank/ REIA Real Estate Market Facts shows that Sydney’s median house price is the highest among the capitals at $843,994, while Hobart remains the lowest median house price across Australian capital cities at $360,000; a significant difference of $486,994. Overall prices in the capital cities are easing with the exception of Sydney and Melbourne. Real Estate Institute of Australia’s CEO Amanda Lynch says with the prospect of lower interest rates next year and moderating prices, things are looking optimistic for buyers: “First home buyers in particular should feel confident in being able to enter the market and the re-emergence of first home buyers will be good news for everyone.”
New-builds in favour as loans for new homes rise
The value of mortgages to build new homes reached near record levels in October according to new figures from the Australian Bureau of Statistics. Although the overall value of home loans across all property types eased back by 1.4 per cent, loans for new constructions were up by 1.5 per cent. Over a 12-month period lending to owner-occupiers for new homes has increased by 14.6 per cent nationally but some areas have shown significant hikes; Tasmania 61.5 per cent; NT 35.1 per cent; ACT 12.3 per cent; Victoria 9.5 per cent; WA 8.5 per cent; Queensland 4.2 per cent; and NSW 1.2 per cent. There has been a slight decline in South Australia. Diwa Hopkins, an economist with the Housing Industry Association says that owner-occupiers are not the only ones who were arranging loans in October: “Lending for the construction of rental housing or housing for resale remained strong during the month. The value of lending edged higher by 0.5 per cent to be 24.3 per cent higher than a year previously.”
Property investment curbed by ARPA announcement
Speculative property investments are the target of the Australian Prudential Regulation Authority which says that it wants banks to restrict loans for that purpose to 10 per cent per year. Although some economists say that the measure is unnecessary for the housing market with price increases starting to ease, the regulator is keen that the lenders should not be over exposed to riskier investments. Industry experts say that most banks already have policies in place that protect them from high-risk investment portfolios so those seeking mortgages shouldn’t find that much has changed. There is a separate focus on interest-only loans by the Australian Securities and Investment Commission with the level of these type of loans at a record high.
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