New Data Reveals Positive Position

Posted on 22/01/2019  
New Data Reveals Positive Position

Price data from leading website realestate.com.au shows market conditions across Australia are highly variable and generally present a more positive outlook for the market than has elsewhere been predicted.

The realestate.com.au numbers show that Hobart has continued to out-perform, rising 8.4% in the past year. It records year-on-year median house price decline of 5.9% in Sydney and 1.5% in Melbourne, considerably less than the rate of decline claimed by CoreLogic.

Adelaide prices rose 1.1% on average but its high rate of views per listing – 1,257 – reflects a market in strong demand, says the website's chief economist Nerida Conisbee .

She says tighter lending standards and negative sentiment have been part of the cause of lower house prices in some cities, but she expects the low unemployment rate to help the biggest cities ride out the downturn and resist a crash.

Prices plummet when people lose their jobs and are forced to sell their homes – as was the case during the global financial crisis, she says.

“We’re not seeing the big jumps in listings that are typical of a price crash,” Conisbee says. “The economic conditions of Australia are OK and should provide a buffer for how far prices fall in Sydney and Melbourne.”

Conisbee says the impact of negative gearing being abolished by a future Labor Government differs as to which side of politics is constructing the economic modelling.

As financial institutions were put under the microscope during the Royal Commission, the banks applied tighter lending standards. But the Australian Prudential Regulation Authority (APRA) winding back the cap on interest-only loans in December was the first sign it will get easier to borrow, Conisbee says.

 “If anything, the sign from APRA is they think the risks are over and the Royal Commission didn’t have a huge focus on home loans and risky lending,” she says.

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