According to reports, the housing market across Australia is cooling. The only exception is Sydney, which is still recording strong growth. However, with economists speculating that interest rates may fall further during 2015 and that prices will moderate, buyers could become more optimistic.
The Housing Market
Sydney’s median home price reached $858,000 at the end of 2014. The median rose 17.6 percent over the year. Whereas Melbourne recorded a 12.1 percent rise to $660,000, and Brisbane a 10.0 percent rise to $492,000.
Home prices in Adelaide, Hobart, Darwin, Perth and Canberra over 2014, rose faster than inflation. Adelaide recorded a 9 percent rise to $430,000, Hobart an 8.8 percent rise to $350,000, and Darwin a 6.9 percent rise to $562,000. Perth recorded a 6.4 percent rise to $550,000, and Canberra increased by 3.8 percent to $575,000.
On average, capital city prices rose by 12.6 percent during 2014. But, price growth began to decline at the end of April. This, for many real estate experts, suggests that the market is cooling despite favourable growth.
Changes in Property Investment Lending
Property investment has been curbed with the Australian Prudential Regulation Authority (ARPA) restricting investment loans to 10 percent per year. This act was brought into effect in order to reduce the over-exposure of lenders to what the ARPA classify as riskier investment.
Some economists, however, feel that this is an unnecessary measure by ARPA as housing prices are starting to ease. Furthermore, many lenders already have policies in place that will reduce their exposure to ‘high-risk portfolios’. This means that those seeking investment loans will likely find that little has changed since ARPAs announcement on investment loan restrictions was made.
First Home Buying and Bargain Hunting
First home buyers, and those looking to bag a bargain, should be able to enter the market with confidence as home loan rates are tipped to fall further in 2015. In addition, increased popularity in new builds is seeing more building home loans being granted.
However, home loan specialists still recommend shopping around to find the best home loan deal, and for those seeking to do so without stress, enlisting the services of a broker to compare home loans on your behalf. This will enable you to find the best home loan for you and your personal and financial situation, without giving yourself a headache.
Are you thinking of buying a home? If so, then contact eChoice and find the right home loan for YOU today.
Written by eChoice