CoreLogic figures show that price growth, nationally, during July was 1.6 per cent. To put that into context, growth during this extraordinary surge in prices peaked at 2.8 per cent in March.
House and apartment prices in Sydney rose an astounding 18.2 per cent over the 12 months to July 31 and were up 10.4 per cent over the same period in Melbourne.
Prices in capital city markets at one point were rising by as much as $400 a day. The median value dwelling in Sydney is now $1,017,692 and $762,068 in Melbourne, CoreLogic’s figures show.
Housing affordability constraints would likely see more slowing price growth in coming months.
Sydney recorded the sharpest reduction in price growth during July, but prices still rose by 2 per cent, down from a peak of 3.7 per cent in March.
The price growth in the country’s biggest city is even more remarkable considering greater Sydney spent the month in lockdown.
Prices in Melbourne rose by 1.3 per cent in July, compared to 2.4 per cent in March of this year.
Sydney is not only the most expensive capital city to buy property by some considerable margin, it has also been the city where values have risen the most over the first seven months of the year, says Tim Lawless, CoreLogic’s research director.
“Worsening affordability is a key contributing factor in the [price growth] slowdown in Sydney, along with the negative impact on consumer sentiment as the city moves through an extended period of lockdown,” he says.
Usually, when affordability starts to tighten, it is those looking to purchase their first homes that are the first to feel the pinch. And that is what we are seeing with first home buyers.
First timers are starting to retreat from the market as cashed-up property investors attracted by the prospects of significant capital gains come into the market in greater numbers.
Even though fewer first home buyer mortgages are being approved, the average size of first home loans is rising, as those who decide to press ahead and buy are forced to pay higher property prices.
CoreLogic figures show the rise in prices of the upper 25 per cent most expensive properties across the capital cities is slowing – another sign of affordability impacting the market.
Lawless says that previous “circuit breaker” COVID-19 lockdowns have generally seen housing values remain resilient, but the number of home sales and listings activity has been more substantially disrupted by the most recent tighter restrictions.
“Once restrictions are lifted, it’s likely pent-up demand will flow through to an increase in activity again,” he said. “However, uncertainty associated with the duration and severity of Sydney’s lockdown could see a greater disruption than in previous periods of restrictions,” Lawless says.
AMP Capital chief economist Shane Oliver expects property prices to keep slowing nationally, with gains of just 5 per cent next year.
Dr Oliver says 2023 could see the start of another cyclical downturn in property prices as the interest rate cycle starts to move up more decisively. Prices could fall by 5 per cent during 2023, he says.
Article Source: www.brisbanetimes.com.au
from Queensland Property Investor https://ift.tt/37gr9If
via IFTTT
