House prices are at historical highs, records tumble every weekend at real estates auctions around the country and price growth rates continue to rise.
Despite those facts, nearly 40 per cent of Australians believe that now is a good time to buy.
According to new research from the financial comparison website Canstar, 38 per cent of those surveyed believed that it was a good idea to buy property now.
Canstar group executive financial services Steve Mickenbecker said that of those who thought it was a good time to buy, many were expecting prices to continue to rise. They also cited low interest rates as another reason.
“Either way there will be no shortage of buyers as sellers come out,” he said.
“Today the market is overwhelmed with buyers, auctions are intensely competitive, open houses crowded, and unconditional contracts are becoming the norm. Low housing supply on the market has intensified the fear of missing out. We are in a low interest rate frenzy.”
Of the 39 per cent who said they didn’t think now was a good time to buy, 45 per cent said the market was currently in a bubble, inflated or under-supplied.
Mr Mickenbecker said the almost-equal number of respondents who said it was a good time and a bad time to buy indicated the rapid growth was slowing down.
“The Reserve Bank and APRA are likely to welcome a leading indicator of a return to balance, tempering growth and discouraging bank excess, but at the same time strong enough to support sustainable economic growth that won’t implode,” he said.
“The Reserve Bank doesn’t want to hurt the broader economy with higher interest rates and currency and is hoping for healthy property prices to support spending, but at a slower pace, so first-home buyers can afford to stay in the race.”
The latest quarterly Domain House Price Report, released last week, found price growth had hit a 32-year high in March.
Sydney’s median house price for the last quarter was $1.3 million, and Melbourne’s reached a record high of $975,000. Hobart’s was just above $600,000, and prices in Canberra grew 20 per cent in a year to a median of $930,000.
Brisbane and Adelaide’s median house prices were at their highest ever, and Perth’s was at its highest since December 2015. Darwin’s median house price was at its highest since December 2017.
CoreLogic figures released this week showed the rapid growth had started to slow, but prices continued to grow in every capital city and regional market in April.
“First-home buyers have been anything but deterred from the market and have leapt in with gusto, encouraged by government incentives,” Mr Mickenbecker said. “They are increasingly competing with investors able to make unconditional offers and blow them away at auctions, and would clearly welcome a more stable market.
“The market continues unabated for now, but a slow and steady future is hopefully ahead of us.”
Article Source: www.domain.com.au
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