AS the property downturn draws to an end, there are important lessons for policy-makers, lenders and investors to be learned.
Labor’s loss has eliminated the number one risk to the property market and this, combined with the high likelihood of interest rate cuts by the RBA this year, the introduction of the First Home Loan Deposit Scheme and APRA’s proposal to remove the 7 per cent ‘stress test’ replacing it with a 2.5 per cent buffer, will support the bottoming of the Sydney and Melbourne markets by the end of the year and then a gradual recovery.
In September last year, some experts warned of collapse due to ballooning household debt, compounded by sliding prices in Sydney and Melbourne, that would escalate to falls of 40-45 per cent in the next 12 months.
This clearly has not happened and with the rate cuts and changes to the first home buyer scheme, it will have a flow on to property prices.
With further rate cuts on the horizon, it is likely to give the market a bit of a boost and contribute to the house prices stabilising.
The Queen’s Birthday Long Weekend in Sydney lead to a more subdued auction weekend, with clearance rates decreasing 12 per cent from the previous week to 54 per cent. There were half the amount of auctions than recent times which would explain the soft numbers.
We are still seeing a lack of stock compared to previous years. So if you are thinking of selling, now is a great time to get your house ready for market.
If you are thinking of buying or selling, give the experts a call – Amanda, 0410 608 352 and Tony, 0413 696 722.