It’s over: Aussie buyers break up with the market, potentially ending the property boom
Sydney property prices have fallen by 1.4% during the September quarter, which is reportedly its largest fall since the 2015 December quarter, according to recent figures by the Australian Bureau of Statistics (ABS).
Housing prices in Perth, Darwin and Canberra also dropped during the September quarter, with the total average property prices across the country also falling by 0.2%.
HSBC’s chief economist for Australia, Paul Bloxham, is predicting Australian housing price growth to fall even lower in 2018, ultimately ending the property boom. However, he has hope for a steady fall, rather than a painful crash.
“A hard landing is possible, but we believe this would require a negative shock from abroad and a sharp rise in the unemployment rate,” he said.
He believes that the reason for the decline in Sydney and Melbourne is due to increased property supply, higher lending rates for investors and the fall back from foreign buyers.
“We expect these factors to continue to weigh on housing price growth in the coming quarters and retain our forecast that national housing price growth will slow from the double-digit rates of recent years to three to six per cent in 2018.”
Construction will also fall due to the overwhelming surge in building, which Bloxham claims is enough to support a steadily increasing population and low interest rates.
Currently, the total of value of Australia’s residential dwellings is at $6.8 trillion - a $14.8 billion increase from the September quarter.
If you’re an Aussie looking to score on the property market, finding your perfect home loan will be high on your to-do list.
Unsure of what to look for? Here are some of the most common features you should consider before you start comparing:
Offset account - An offset account can help you reduce the amount of interest you pay, as any money in the account will be offset against the principal of your loan. For instance, if you had a loan amount of $800,000 and a balance of $50,000 in an offset account, you’d only pay interest on $750,000.
Extra repayments - Having the option to make additional repayments on your loan can also bring down the interest you’ll pay.
Redraw facility - But just in case there’s an emergency and you need that cash back, a redraw facility will grant you access to your extra repayments.
Home loan top up - If you’re planning on doing any renovations in the future or need a new car, a home loan top up is a great loan feature. Keep in mind though, the amount a lender can give you will depend on the equity in your home and your income.
Ready to apply for loan? Mozo’s home loan comparison tool compares over 500 loans from 80 lenders to help get you closer to your dream home.