Property news: first Spring edition!
There's been a lot more acceptance of the current market conditions lately. Especially with the realisation that Spring (when activity begins to pick up) is around the corner, it seems that there has been more positivity around. Then, just when you think things are looking up, AFR hits us with this line from Core Logic
But here is the crux of it (quoting CoreLogic research analyst Cameron Kusher within the article)
"Housing's become very unaffordable in Sydney and Melbourne," Mr Kusher told The Australian Financial Review.
"But it's the credit tightening – people can't borrow as much as they used to be able to do. It's harder to get finance and they're having to shop around more.
"Wages aren't increasing. People aren't getting money in their pocket when they come up for salary review. They can't afford to purchase more properties."
Housing is still unaffordable that is, prices are still 'healthy'. So this is just a correction in the market. It's the lending restrictions really slowing the market. You can read our article about lack of money in the market here.
In other news, Westpac was the first of the big 4 to raise interest rates, begging the question, who is next? Whilst the media is ringing the alarm bells, David Plank, senior economist at ANZ and a fellow big 4 bank had this to say:
“In the normal course of affairs, we wouldn’t view an increase of 10–15 bps in the floating mortgage rate as all that material. - Bank rate hikes ‘reasonable’ despite ‘unusual’ market: ANZ, Mortage Business
Meanwhile, here is an interesting new concept that has taken off overseas and coming to Australia. It's called co-living, and it looks like it may present some interesting investment opportunities. You can read more about it here.
PS. Check out our latest video on Facebook about what we think about the current market and how it is contributing to the next boom.
Have a great week everyone!