Those who are thinking of entering the housing market can always benefit from listening in on predictions in the real estate scene.
But to understand where the market is heading in 2016, buyers and sellers must first look back at what happened over the previous year. A recent release by CoreLogic RP Data does just this, exploring the twists and turns Australia’s property market experienced over 2015.
A sterling year for Australian property
Figures show that, overall, it’s been a superb year for the property market. The article indicates that by the end of 2015, the total value of Australian residential real estate reached an astounding $6.3 trillion – a $600 billion rise over a year earlier. Furthermore, $283 billion worth of housing was bought and sold over this period, across roughly half a million property transactions. All of this makes residential property the country’s most dominant asset type.
That being said, the level of performance has been varied over the different regions in the country. A December 15 release by the Housing Industry Association reported that in September, Darwin and Perth saw a year-on-year decline in dwelling values of 2 and 3.3 per cent respectively. Simultaneously, regions like Brisbane, Canberra and Adelaide recorded modest but healthy increases around the 3 to 4 per cent mark. However, it was Sydney (along with Melbourne) that really helped to haul overall national figures to unprecedented heights, reporting a 19.9 per cent year-on-year climb in housing values over this period.
This all means that for sellers, it’s been a fruitful 12 months of high profits, particularly in Sydney. In a January 4 release by CoreLogic, Head of Research Tim Lawless said that “in dollar terms, Sydney home owners have seen approximately $82,000 added to their wealth thanks to the strong capital gains over the year”.
On the flip side, however, it hasn’t been an entirely accommodating environment for new home buyers in the city, with dropping housing affordability being a commonly cited issue for Sydneysiders and experts.
Fortunately, key indicators show that things could be turning around in 2016. This could finally open new opportunities for house hunters and keep in mind Customs Bank can assist with your financing requirements.
Buyers to be favoured
As policies and governmental interventions continue to take effect, home buyers should be seeing a positive remedy to the housing affordability issue in Sydney.
The January article by CoreLogic also reveals that over the last few months of 2015, signs of significant cooling in Sydney’s market appeared. Looking from a yearly perspective, housing values have indeed been high for this city as it remains to be Australia’s largest and most active housing market. However, taking a closer look will show that dwelling values have started to slide back, as many experts had predicted.
Over December, Sydney recorded a 1.2 per cent decline in dwelling values – the second month in a row where a decrease has occurred. From a quarterly perspective, this represents a 2.3 per cent drop and has pulled the median dwelling price to $800,000 – quite a notable difference when you consider that this figure was near $1 million months earlier.
Mr Lawless said that this cooling of value changes “is being driven by a range of factors that can best be described as both organic and externally influenced”. The resurgence of new housing being constructed is one key aspect, as well as the massive tightening of lending to investors, which has helped slow real estate demand in the city, as we’ve mentioned in previous articles.
This means that if you’ve struggled to get your hands on Sydney property, 2016 might just be the year for you. If prices come down from their lofty heights, you may be able to set your sights on homes that were previously out of your price range. So, whether you’re after a suburban house or an inner-city unit, contact the professional team at Customs Bank who can assist with your financing requirements.