Looking into Sydney’s real estate condition
Over the last two years, we have all been witness to a hot Sydney real estate market. We saw a surge in auction rates, as well as the average Sydney home, get closer and closer to the million dollar mark.
A recent Domain report shows signs that the Sydney market is finally slowing down, but the question is, does this provide any relief for first time home buyers trying to get into the market?
The report shows that Sydney’s buyer activity still remains at a minimum. despite the noted slow down. According to the latest data from ABS, loan approvals declined by 0.7% in July 2015.
Loan approvals from first home buyers in the last seven months are at 5.6% below compared to the numbers posted within the same period of last year. Investor loan approval suffered a sharp fall over the month failing to boost first home buyer activity amidst market share increase. Loan values linked to first home buyers for July comprised only 7.7%.
Consequently, the first home buyer loan market in NSW remains the lowest across states. Although mortgage rates have gone down in the past 50 years, first home buyer activity continue to struggle because of affordability barriers. This also reflects the abnormal price growth in Sydney over the last years. Though Sydney’s housing market seems to be cooling off, there are still no indications that first home buyer activity will increase soon.
Authorities, including regulators, have launched initiatives to ward off residential investor lending especially through increased interest rates. However, other experts do note that officials may have to try to develop other initiatives cutting interest rates on first home buyers to ignite the homeownership market more.
What do you think?
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