This time last year we were being urged to watch out for signs of distress in the market. Warning that as fiscal support tapered and home loan deferrals expired, we may see an increase in distressed sales and a subsequent downswing in property values.
Well…that certainly wasn’t to be the case, was it! The Federal Budget saw policy measures aimed at stimulating housing activity in the hope of supporting Australia’s economic recovery and didn’t they just.
Improving economic conditions, record low-interest rates and a surge in buyer demand at a time when available stock remained low, created a sense of FOMO and urgency amongst buyers which in turn contributed to the continued upward pressure on home values throughout the year.
Data from CoreLogic indicates the market has been steadily losing momentum.
However whilst the monthly pace of growth is now easing, the market is still appreciating with Sydney’s Annual house values up a whopping 30.4% (Year to October). WOW! Certainly not what we were expecting this time last year.
Tim Lawless, research director for CoreLogic, suggests with the surge in new listings, the potential for tighter credit conditions and worsening affordability along with economic forecasters now predicting rate hikes as soon as late 2022, that going forward less growth in housing values or the commencement of a downturn is possible.
For the moment auction clearance rates, days on market, and vendor discounting rates all point to this still being a vendor’s market.
“Wishing you all a very
Merry Christmas and a Happy,
Healthy and Prosperous New Year”