Good News in the Property Market?
For those who find themselves continually losing out on a property, good news could be at hand.
It is VERY early days, but data just released by the Australian Bureau of Statistics (ABS) indicate that there could be a cooling off of the (investor) property market.
According to the ABS monthly approvals data shows that owner occupied lending rose 0.84 per cent (up $105 m from last month’s approvals), refinancing up 0.72 per cent ($44 m) and Investment lending up 0.14 per cent ($19 m).
While it is too early to be sure such data indicate that influence from the regulators is starting to pay off as:
- The excess heat may be coming out of the property segment, thereby limiting price growth
- There is a focus on off-the plan sector, thereby boosting jobs
If so, this is good news for the property market and the wider economy
The data showed that year-on-year investor commitments for construction of new dwellings has increased by 81.5 per cent compared to a 12.9 per cent rise in the much larger segment for purchase of established investment homes. According to RP Data Corelogic’s Cameron Kusher “It seems that there is a growing appetite for investment in off-the plan investment properties while demand for established investment stock is waning a little.”
RP Data Corelogic believes that guidance from the Australian Prudential Regulatory Authority (APRA) will soon result in around 10 per cent growth in the investor sector. However, with ultra-low interest rates and unemployment having peaked, it also believes that the housing sector remains on a firm footing.
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