Hope everyone is enjoying their freedom on the other side of lockdown?
So, what is everyone talking about this side of lockdown besides when and where to go on a holiday?
Housing Affordability.
The hottest subject across media, real estate, and the finance industry!
Media mentions of housing affordability surged in September and were up by 141% from October 2020. The roar of media coverage of the house prices in March this year was at its loudest coinciding with largest monthly increase in national median house values in almost 30 years.
With a combined capital city increase of house prices over the last 12 months to September by 20% and a regional increase of 25%, inevitably the conversation will be focusing on housing affordability.
The follow-on effect of conversations about housing affordability will lead to conversations about negative gearing and the amount of housing stock available, which took a back seat while the pandemic dominated the conversation.
We are hearing in the media and supported through real estate data that property listings are finally starting to lift from recent record lows. More listings mean more choice for buyers which will help take a little “heat” out of purchasing decisions.
FOMO is still likely to remain as a feature in this market while auction clearance rates, days-on-market, and vendor discounting rates remain at above-average levels – this is still a seller’s market.
On the other end of the affordability conversation, APRA increased the serviceability buffer to ensure borrowers can afford the debt they are taking on.
The general talk around town is that the property market may start to rebalance towards buyers late this year or early next year, however, a rise in interest rates expected late 2022 or early 2023 will be the cue for the housing market to move downswing and have a further negative impact towards affordability.
Talk soon.