After five years of rising house prices the signs are now evident that the market is softening. The once red-hot market seems to have peaked in late 2016 with the days of double-digit price growth coming to an end.
Tougher criteria in investment loans, the construction boom, and a slowdown in foreign investment have all contributed to reduced buyer activity and a slower market place. Unlike previous years where markets have crashed, record low interest rate levels have meant the market has merely plateaued and will probably flatten rather than dip dramatically. According to REI President John Cunningham “… prices have just caught up with buyers”.
Listing numbers have also increased and according to Corelogic, Sydney stock numbers arenow at their highest this time of year since 2012. Mr Cunningham also said that while prices are not expected to fall, if supply continuesto rise, the market should become more balanced.
Treasurer Scott Morrison said that supply was the key to stabilising the market. “The reason why house prices have skyrocketed in recent years is becausewe aren’t building enough houses to keep up with the insatiable demand”.
Locally, we have seen an increasein the number of firsthome buyers due to the stamp duty exemption for homes up to $650,000. The investors are still there but are not the dominant player they once were. Our acreage market is still fuelled directly or indirectly by the wealth from the redevelopment of Sydney’s North-West. The beautyof the Hawkesbury and the relaxed lifestyle it offers continues to be the attraction for many property buyers.
If you would like to get the right advice on any property matters, please call me on (02) 4578 1234.