One of the biggest markets in Australia is the property market. Over the past few years there have been hundreds of articles and news stories about house prices rising with no foreseeable top limit. But it seems as though we are about to see some changes. If you’re interested in finding out where the Australian property market is going, keep reading.
House prices will continue to fall
After a long period of growth, the Australian property market is beginning to slow down. Statistics have shown that in the March quarter of 2018 house prices fell by 0.5% as a whole, however the most notable drop was at the top end of the market in which prices fell by 1.1%. This change differs depending on location, Sydney prices appear to be dropping at a dramatic rate and it seems as though Melbourne will soon follow.
First home buyers over investors
Mortgage re-pricing has seen a shift in buyer behaviour. Investor interest rates have increased exponentially in comparison to the small increases for owner occupiers. This has lead to less investors asking banks for loans, and leaving the market open for first home buyers. Less competition from investors allows prices to be lower for first home buyers and will enable them to get their foot in the door. Competitive interest rates mean that repayments will become more affordable for young couples and families. For the first time in years, its becoming attainable for young people to buy their own home.
Upgrading over Upsizing
There are so many things to consider when not only buying a home, but when selling one. Something people often forget about is stamp duty; this tax has to do with property transfer, and it doesn’t come cheap. On average, for a median priced Sydney house, stamp duty is a huge $50,000! This means many people are opting to stay in their current home and renovate rather than moving to something bigger; with a 14% rise in people choosing to renovate within the next five years.
Things to Remember
With all the shifts in the market, it has changed the game and we will now have to reassess how we buy. Here are a couple of things to consider in light of the changes. Firstly, don’t rush into buying right now, if the market is dropping, and you wait for a year, you may save yourself money. Essentially, you might get the same house for less, just by waiting. But, don’t wait too long. What goes down must come back up. So don’t be obsessive about waiting for the right time- you may miss your chance. Lastly, do your research, this involves looking at houses that don’t look great online, you may be missing out on an opportunity by not giving something a chance. Its also important to remember that just because the market is dropping, some houses will still go for sky high prices. The best way to get a good deal is by being aware of what’s out there.
Its clear that there are some pretty drastic changes happening in the property market, and it doesn’t seem like they are going to stop any time soon. If anything, it appears we should prepare ourselves for even more changes.