December Property Snapshot Infographic
2016-01-11
The capital city housing markets remain extremely diverse. Home values have recorded strong growth over the past year in Sydney and Melbourne, moderate growth in Brisbane and Canberra while values have fallen across each of the remaining capital cities with much greater falls in Perth and Darwin. More recently we have seen signs of falling values in Sydney and slowing value growth in Melbourne while markets such as Brisbane and Canberra continue to record low levels of value growth. Outside of the capital cities, regional markets linked to the resources sector are generally seeing home values and transactions remain weak. On the other hand, coastal and lifestyle markets are generally bouncing back with both values and buyer demand generally lifting.
The diversity in the housing market highlights the different growth drivers that are evident from region to region. The economies of Sydney and Melbourne are relatively sheltered from the downturn in the resources sector and have benefited from a very healthy services sector and positive population inflows while the mining states and territories are experiencing softer economic conditions and a sharp wind down in population growth.The annual expansion in investor related housing credit has now dropped to a pace that is lower than APRA’s mandated 10% growth per annum while credit growth for owner occupiers is expanding. With many banks now placing a premium on investment mortgage interest rates and also increasing mortgage rates and serviceability limits on all mortgages we are seeing evidence of a cooling in investment housing demand. While investor demand appears to be slowing, owner occupier demand is rising as many banks switch their focus to this market segment.
The cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, is likely to continue to impact the Sydney and Melbourne housing markets resulting in a further slowdown in these cities. On the other hand South-East Queensland looks set to see further increases in housing demand and potentially stronger value growth. Hobart and Canberra also appear better set for value growth over 2016 due to improving housing and economic conditions and relatively more affordable housing compared to Sydney and Melbourne.
The diversity in the housing market highlights the different growth drivers that are evident from region to region. The economies of Sydney and Melbourne are relatively sheltered from the downturn in the resources sector and have benefited from a very healthy services sector and positive population inflows while the mining states and territories are experiencing softer economic conditions and a sharp wind down in population growth.The annual expansion in investor related housing credit has now dropped to a pace that is lower than APRA’s mandated 10% growth per annum while credit growth for owner occupiers is expanding. With many banks now placing a premium on investment mortgage interest rates and also increasing mortgage rates and serviceability limits on all mortgages we are seeing evidence of a cooling in investment housing demand. While investor demand appears to be slowing, owner occupier demand is rising as many banks switch their focus to this market segment.
The cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, is likely to continue to impact the Sydney and Melbourne housing markets resulting in a further slowdown in these cities. On the other hand South-East Queensland looks set to see further increases in housing demand and potentially stronger value growth. Hobart and Canberra also appear better set for value growth over 2016 due to improving housing and economic conditions and relatively more affordable housing compared to Sydney and Melbourne.
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