From $9.95tn to $9.8tn: CoreLogic shows market is cooling
Half of Australia’s capital cities saw values decline in the months leading up to July, according to CoreLogic’s Mon...
First-home buyers are expected to return to the market by the end of 2019, meaning property investors could have less-than-expected competition on their hands for the next few months.
PRDnationwide’s Q1 2019 Key Market Indicators showed that the number of first-home buyer loans saw a decline of 3.7 per cent over the last 12 months up to the September quarter of 2018.
The report labelled this as a ‘disappointing result’ as the RBA has seen the cash rate hold at its all-time low over the last 28 months.
“This is reflective of tighter lending criteria enforced by banks, political instability, and a downturn in some capital markets,” the report read.
“First-home buyers are waiting for the optimal time to enter the market and are watching property trends closely.
“It would not come as a surprise if there was a spike in first home buyer activity towards the end of 2019.”
Also mentioned in the report was how various factors have seen the Australian Consumer Sentiment index to drop below positivity at 99.6 points, a 5.2 per cent decline.
It pointed to the banking royal commission, changes in political leadership and various uncertainties about potential changes to negative gearing.
However, the home affordability index rose by 2.6 per cent to 31.9 index points over the last 12 months to the end of the September quarter of 2018, which meant property was becoming more affordable.
“The great thing about an affordable market is it’s going to benefit a wider Australian market,” said Josh Mangleson, the research analyst responsible for the Key Market Indicators report.
Another rising trend noticed by Mr Mangleson was an increase in rental transactions.
“Where we’re seeing less sales, we’re seeing more rentals,” Mr Mangleson said.
“What this means ... for investors, is that in these markets where there are softer prices, if there’s increased rental activity as well, there’s an excellent opportunity to invest into those areas, purely because there is more demand.”
The Key Market Indicators report also analysed the states and territories of Australia to determine the most successful in terms of property and economy, based on the number of first-home buyer loans, the home loan affordability index, the number of dwelling approvals, the unemployment rate, weekly family income, the standard variable loan, the consumer price inflation index, the consumer sentiment index and net migration.
Of these indicators, Victoria was considered to be the winner for the most first places of five indicators: number of first home loans, dwelling approvals, unemployment rate improvement, growth in median weekly family income and net migration.
The ACT was runner up, taking out four first places of the indicators: home load affordability index, lowest unemployment rate, growth in number of dwelling approvals, as well as median weekly family income.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.