House prices have fallen sharper than expected, the latest ANZ Australian Housing Update says, it found that the level of auction clearance fell in December and have since risen. Nationwide, ANZ Research expects prices to rise sharply by the end of 2019, driven by Sydney and Melbourne, with gains expected to moderate to around 6% in 2020 and 4% in 2021.
Yet market recovery became much more evident from May on when the Federal Election was decided, while the change in sentiment was motivated by a combination of easier access to credit, lower interest rates, and greater optimism over property unit taxation. The ANZ report says that Sydney and Melbourne have driven the recovery in prices. Prices stabilized in the two largest cities after a period of decline in June. Over the past three months, prices have risen by 3 percent in both cities, with more price rise forecast.
Rates tend to stabilize in Brisbane and Adelaide after a time of moderate
weakness. Hobart rates are now looking to stabilize after a big jump
since the start of 2016, with prices rising by 34%. The report
suggests that prices will continue to rise nationally through the
quarter of December, with growth forecast at an average of 6 percent
for 2020 and 4 percent for 2021.
The national debt-to-income ratio for households is also still very high,
with household income nearly doubling. While there is no evidence of
a pick-up in credit growth yet, higher household debt will eventually
be fuelled by the recent boost in housing finance and probably more
house price rises. High household debt leaves vulnerable
householders. Mortgages are generally affordable now that interest
rates are low Australia's mortgage arrears rate is low compared to
other countries, but the impact of high debt would amplify a negative
shock that drives higher unemployment.
Original Post Here: Property Prices Rise Sharply
