22 Feb Soaring house price growth is over, says CBA
If there’s one topic that has dominated property news in the latter part of 2017 and 2018, it’s the price of property in Australia. Just in case we needed to hear it again – the boom is done and dusted. But now the CBA says that ‘the days of soaring house price growth in Australia are over’.
But it’s not really the doom and gloom predicted.
Despite the fact that flat price growth is being predicted for 2018, there are still minor increases expected in most capital cities (all except Sydney and Darwin), so there is definitely light at the end of this (short) tunnel.
Michael Workman, senior economist at the CBA, suggests however that there are many factors increasing the ‘headwinds for housing prices’.
Some of the factors included tighter lending controls, weak wage growth and affordability constraints. This will eventually lead to an increase in mortgage rates. ‘Tighter lending criteria acts like an interest rate rise’, he says.
The higher stamp duty charges on foreign investors introduced by several state governments recently have also resulted in a decreased interest in Australian property from overseas buyers. Construction of new dwellings is still ‘relatively high’ according to CBA, leading to an increase in housing supply – another factor preventing an uplift in prices.
However, he admits that this, like most previous property price falls in Australia, will be ‘short-lived’, and growth is, in fact on the cards for sometime in 2019. Not a long time to wait. So if you can hold off, don’t go selling just yet.
Read the full article here.
No-one has the crystal ball on property, but right now, one thing is for certain. It’s a great time to jump in and invest. If you’d like more information, are looking to invest, or are looking at buying your first property feel free to get in touch with the team!