Tag: firsthome

HYF 200209 Property market rebounding faster than expected 919x536

Property market rebounding faster than expected

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The rebound of property price has accelerated at the end of last year based on recent data (refer to tables), demonstrating much faster rebound than originally expected.

The Rebound that started mid last year, is showing prices rising in most capital cities in the second half of 2019. Melbourne and Sydney have had the fastest turnaround, but that recovery has spread to all capital cities. (see chart below)

The three most recent rate cuts by the RBA and the expectation of lower rats for an extended period have caused an increase in property prices. Another contributing factor could be that more people were aiming to buy property in the second half of 2019.

This rapid price rise will also boost the construction sector. Apartment construction is expected to slow further this year, but the rebound in price should activity should be building activity similarly rebounds solidly in the years ahead. Property sales should also increase this year, likely to driving higher consumer spending.

Due to this rapid price increase, a boost to the construction industry is expected. Even though apartment construction is expected to slow down this year, the rebound in price should similarly cause solid rebounds in building activity for years to come. Property sales should also increase this year, likely to energise higher consumer spending.

The challenge for RBA to cut interest rates further is the speed of the price rebound. For RBA financial stability is crucial, thus keeping rates on hold for an extended period may be a highly probable option.

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191024 First Home Buyers News

Lower Deposit Scheme For the First Home Buyer gets a go-ahead.

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The First Home Loan Deposit Scheme will help first home buyers enter the property market sooner, by providing a Government guarantee that will allow first home buyers to purchase a home with a deposit as low as 5%.

The Coalition Government passed new laws through Parliament this week to implement the First Home Loan Deposit Scheme, which is expected to kick off on 1 January 2020 and will support 10,000 first home buyers on low and middle incomes each financial year.

In a joint statement with Minister for Housing and Assistant Treasurer Michael Sukkar, Treasurer Josh Frydenberg said the passage of the scheme will “facilitate earlier access to home ownership for first home buyers”.

“The Government recognises that saving a deposit has become a more significant barrier to entering the housing market. It can take ten years for the average first home buyer to save a 20% deposit.”

Chief Executive of the Property Council of Australia, Ken Morrison, said the new first home loan scheme will not only make it easier for first home buyers to get into the market, but it will also provide timely stimulus for housing and construction supply.

“The current ‘deposit gap’ has been a big hurdle for many first home buyers and adds to the time they need to spend saving to meet the lenders deposit requirements or purchase expensive mortgage insurance,” Mr Morrison said.

“The First Home Loan Deposit Scheme reduces these barriers to entry for up to 10,000 first home buyers every year, and boosts support for construction sector jobs, helping to drive economic growth at a critical time.”

The Bill, first introduced into the House of Representatives on September 12 and the Senate on September 18, was passed by both houses this week.

190827 AuctionHammer-unsplash

Impressive Capital city Auction clearance rates

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There is a continued upward trend in auction clearance rates, strengthening claims of a resurgence in demand for house. 

In the week ending 25 August, preliminary auction clearance rate of 79.6%, was reported by Property research group CoreLogic.

which follows from a final clearance rate of 73 per cent recorded in the week before, being the highest final clearance rate in over two years.

Auction clearance rates are up 25 percentage points from 54.6% compared to same week last year.

The clearance rates were highest in Sydney (84.7%), followed by Melbourne (79.7%), Adelaide (72.4%), Canberra (68.9%), Brisbane (67.7%) and Perth (62.5%).

In the same week ending 25 August, Melbourne was host to the largest number of auctions (665), followed by Sydney (500), Brisbane (94), Canberra (75), Adelaide (56) and Perth (20).

This increase in auction clearance rates has come amid mounting evidence of a recent rise in demand for housing. 

Mortgage Choice’s CEO Susan Mitchell said the group experienced a sharp increase in demand for home loans in response to the Reserve Bank of Australia’s (RBA) back-to-back cuts to the cash rate and the Australian Prudential Regulation Authority’s (APRA) new lending guidance.

Ms Mitchell also mentioned that the demand had not come from a particular segment of the market and had come from “across the board”, adding that lenders had reported similar trends.

“We have seen our loan applications rise significantly since June 30. I think everyone has seen that,” she said.

“The feedback I’ve gotten from the banks is that they are as busy as they’ve ever been.” 

Despite the impressive clearance rates, the auction volumes were reduced from 1,915 to 1,412 relative to the same period last year.