Sydney and Melbourne are some of the beautiful cities of Australia that attract tourists, and second-home settlers every year. Unlike Hobart, these cities have had a very low return on real estate investments since last year. Available data shows that Sydney’s median prices for houses and apartments were the highest in the first quarter of 2019. However, there are more amazing details for avid property market investors in this post.
What Are the Factors That Influence Property Markets?
Reduction In Interest Rates
Lending and access to cheaper funds can increase the level of investment and transactions in Australia property market. Generally, real estate and mortgage sectors of any country have connections with its economy. When interest rates decline, it lures people to access cheap funds for investment. However, Australia’s slowing economy has been affected by the downturn of the property market. Most financial analysts expect the Reserve Bank to cut interest rates. Even with its current low-interest rate of about 1.5%, realtors and investors who always consult retail valuers believe there might be better positive stimulus when there’s a further reduction. However, some pessimists believe that positive stimulus from a lower interest rate is not sure if there’s no improvement in household incomes.
Immigration of People to Australia
The downturn in the housing market can be reversed when there’s more immigration of people to Australia. Naturally, foreigners like spouses, students and special-skilled workers are likely to consider shelter as their priority. So, the ‘downward pressure’ on the property market might be reversed because of the demand for housing. Apart from short-stay visitors, foreigners that are resident population in Sydney and Melbourne often increase housing demand every year looking for retail leasing options.
Housing Affordability
A prestigious property market survey that was conducted in the first quarter of 2019 shows that Australia’s average house and apartment prices fell by 2.4%, and 2.2% respectively. This decline in the value of dwellings is because of affordability problems. Will Australian lenders ease their credit policy to enhance mortgage rates in the future? Perhaps, the government can initiate legislation to reduce the percentage of the deposit that’s needed to own homes in Australia.
What is the Index report for Q1 2019?
There’s no doubt that about 70% of Australia’s real estate value is spread in both Sydney and Melbourne. On a national basis, the housing market favored Hobart during the first quarter of 2019. The region’s average price of dwelling rose to $464,168, and it was a 1.2% increase for that quarter. Unlike in Melbourne that recorded a drop in housing price (-3.4%), Canberra had a flat rate in the index of housing prices. This survey shows how expensive properties have suffered the effects of sharp declines. Will Australia’s value of dwellings continue to fall as the rate of employment increases?
What Were the Median Prices in Other Cities During Q1 2019?
The median value of homes in some of Australia cities with expensive property has been analyzed. Generally, they felt the effect of ‘downward pressure’ in housing prices. However, Hobart had a record-high of 1.2% increase and a median price of $464,168 in Q1 of 2019. Perth’s median value was $422,716 with a declining value of -2.9%. Also, Adelaide’s drop in housing price for the same quarter was -0.5%, and the median value was $426,990. Darwin had the sharpest decline in housing price with a -3.9% values, and $400,316 median dwelling price.
Additionally, Melbourne was close to Darwin in the property market index table of Q1 2019. Melbourne’s decline in price didn’t come as a surprise to many analysts after Moody’s Analytics forecast between 20 to 30% fall. However, the city showed a -3.4% price decline during the first quarter of 2019. So, it will be interesting to watch where Melbourne’s property market will go before the year ends.
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