The Dust Has Settled On Our National Housing Market?

Posted by Joshua Mellick

Investors are beginning to inject themselves back into our property market as our market begins to recalibrate post-election. Data shows that buyers are looking again at the residential market as a viable option and making plans with their lenders for finance.

Recent interest rate cuts have seen first-home buyers keenly secure finance for home loans. While APRA has lowered the minimum interest rate serviceability buffer, the number of new loans being approved has begun to increase. New loans approved in July surged 3.9% nationally, a figure exceeding the expectations of many in our current environment.

National housing prices have begun to firm in the wake of these movements. As seen in the below data from CoreLogic, August 2019 saw one of the strongest national performances for the residential sector since mid 2017.

National Housing Market Movements (Source: CoreLogic)

Additionally, more than 70% of loan applications were successful as of the July calendar year compared to the same period last year where only 58% of loans were approved. This data comes as an indicator of the loosening in our financial sector.

New schemes from government bodies performance are expected to be further bolstered over the short-term. The Liberal Government has rolled out its First Home Loan Deposit Scheme that will allow and help first home buyers to enter the property market sooner and more effectively. The scheme will allow first home buyers to purchase a home with a deposit as little as 5%. Approximately 10,000 FHB purchasers will be supported to enter the property market each financial year. The initiative will aid purchasers saving for a deposit which is the major hurdle for current buyers entering the market.

General sentiment around the housing and finance market, is returning confidence to the investment sector. We have already seen positive performance off the back of investors capitalizing on a low interest rate environment. Ultimately, the property and finance sectors have shown strong correlation for decades and the current environment we are in is no different. As the fire of the finance sector continues to be stoked, the market is showing strong signs for those invested in property.

Posted by Joshua Mellick, on 24th Sep 2019