The Australian housing market is on the upswing.
The Australian housing market has been on a downward slide since 2018 when the market dropped to historic lows. From January to December 2018, Australia’s capital cities saw housing prices fall by an average of 5.1%. Sydney and Melbourne seem to be the two most affected cities and the trend continued into the first part of 2019.
The Australian Bureau of Statistics shows that residential property prices fell by an average of just over 2% during 2019’s first quarter in eight of Australia’s major cities. Dwelling approvals saw a drop of 22.2% in the first six months of the year. Supply and demand also dropped but the tides are starting to shift. The housing market in all of the large cities is on the upswing.
Good News on the Horizon
The housing market got good news recently. It saw a series of tax cuts, interest rate cuts, positive media, decrease in housing uncertainty and more leniency with lending guidelines for banks. Buyers started to regain the confidence to borrow money for real estate investment with all of these changes.
More and more people can get mortgages or secure the funding they need to put offers on homes than ever before. Interest rates have also fallen to a rate of 0.75% in the past month. This interest rate is one of the lowest in recent memory.
All of the larger cities in Australia including Adelaide, Brisbane, Canberra and Perth are showing slow but steady signs of recovery. There is a great seller’s market right now because demand is starting to go up, and there is a limited supply of properties to choose from.
Median House Prices
|National (excludes Darwin)||$773,635||2.70%||-1.00%|
Source: Domain House Price Report
Brisbane Predicted to Lead for Price Growth
Melbourne and Sydney are the leaders for areas of price growth, and they experienced a 1.7% increase in September of this year. All regions of Australia are reaping the benefits of improved credit access and low mortgage rates, but Victoria and New South Wales keep outperforming almost all other areas of Australia.
The QBE Australian Housing Outlook predicts that the housing market is on-trend to stabilise over the next few years. Melbourne and Sydney expect to see a 5% increase in housing prices in the next three years, and this is a positive step after recent years’ downturns.
However, Brisbane is the city to watch. According to the Outlook report, there are predictions for the housing prices in this city to skyrocket by 20% in the next three years. But, as the table demonstrates, all of the capital cities show strong growth with housing prices rising.
Adelaide and Darwin follow soon after Brisbane with 12.7% and 7.0% predicted growth, respectively. Canberra, Perth, and Hobart also show promising results with growth ranging from 4.1% to 6.4%.
If you’re planning on selling, this is great news for you, as you’re likely to get a higher price for your property than you may have done a year or two previously. For buyers, it could mean more houses available to buy since sellers are more willing to list their property with the favourable forecast. Since many of the metros have fewer properties at the moment, these properties are likely to achieve sale prices at the top of their estimated value.
The Australian dream of owning a home is stronger than ever before. With these shifting predictions and the explosion of growth, it’s more achievable than ever before. This is especially true when you factor in the more lax bank guidelines and lower interest rates. If you’re considering buying or selling your property, the outlook for the future is bright.
To discuss further, book an appointment with our Lending Specialists, Jayden Chen or contact us today on (03) 9835 8200 if you would like to discuss any points in this article further or should you wish to review your current loan interest rate/structure.