Are House Prices Slowing Down?
It appears that the Aussie property market is starting to lose momentum after having reached record-breaking highs this past year.
Home values grew by 16.1% recently according to CoreLogic’s latest Hedonic Home Value Index, but there are signs that the growth rate is starting to taper.
Signs of a slow down
Australian housing values increased by 1.6%, a result CoreLogic’s research director Tim Lawless describes as “strong, but losing steam”.
The value of new housing loan commitments fell 1.6% in June, the first fall in monthly lending figures this year, according to the latest Australian Bureau of Statistics data.
So, what’s slowing house prices down?
With dwelling values rising more in a month than incomes are rising in a year, housing is simply moving out of reach for members of the community, Mr Lawless explains.
Additionally, much of the government’s earlier COVID-19 related fiscal support, including JobKeeper and HomeBuilder, have now expired.
So what’s ahead?
It’s likely the rate of growth will continue to taper as affordability constraints become more pressing and housing supply gradually lifts, says CoreLogic.
On the flip side, demand remains strong and is being aided by record-low mortgage rates and the prospect that interest rates will remain low for an extended period of time.
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