The housing market may still be uncertain in Australia as 2018 comes to an end. The September auctions proved that buying was low. However, first-home purchases may be on the rise by the end of the year.
What follows is a look at what 2018 has shown us so far and what we can expect in the last months of the year.
How has the 2018 housing market turned out so far?
In July, Bloomberg reported that the market had fallen the farthest in almost seven years, since September of 2011. And September 2018 also marked a full year that the market had been on a downturn across the country.
The overall downturn is largely due to the nation’s largest markets in Sydney and Melbourne, with Sydney doing the poorest over the last year. Melbourne, after the September auction results, ended up as the weakest market, ABC says.
In the Australian Bureau of Statistics’ most recent housing report, it was shown that the number of dwelling commitments decreased in August, and the total value of owner-occupied housing commitments fell 0.2 per cent from July.
First-home buyer increase
While the market overall may be continuing its downturn, the Housing Industry Association brought some more positive news in August. First-home buyer loans increased and reached a six-year high and saw an increase of 11.4 per cent in just a year.
However, some of these new homeowners may be in trouble with their mortgages. Domain indicated that 9 per cent of borrowers owe the bank more than their loan’s value, and it is predicted that first-time home buyers could be the population in the most trouble.
What will the end of the year look like?
CoreLogic says that in recent auctions a decrease in clearance rate could be due to a more restrictive borrowing environment in Australia. The Banking Royal Commission has been putting pressure on lenders to be more responsible with loans, ABC says.
So, homes in Australia may be more difficult to secure right now, especially for those who were planning on making smaller deposits up front.
Whatever the cause, housing markets in the big cities are still declining this month, and the decline is expected to continue as the year wraps up.
In an uncertain market, it’s important to find a mortgage broker that’s on your side. So, if you’re ready to discuss your home loan options, contact our team to make an appointment.