Commentary by some economists and journalists that record low numbers of first home buyers entering the housing market is a sign they are being “forced out” was misinformed, according to CommSec chief economist Craig James.
While James agreed that the proportion of first home buyers in NSW and Victoria is at record lows in both cities where the housing market is buoyant, he argued that first home buyers were also proving reluctant to enter the Queensland market where conditions were less-buoyant.
Australian lenders appear to be loosening credit restrictions put in place in the aftermath of the 2008-2009 global financial crisis (GFC), at a time when New Zealand banks are being forced to impose tighter lending criteria.
More than three-quarters of home loans offered by Australian banks require a 5% deposit or less, with 73% of lenders permitting loan to property value ratios (LVR) of 95% or higher, according to a financial comparison by website RateCity.
Regional and country property markets are proving to have the greatest amount of growth in New South Wales, Western Australia and the Northern Territory, reports Your Investment Property Magazine.
Recently released data from research group Residex has shown that both land prices and house prices grew in the regional property markets in NSW, WA and the NT over the full year August of 2013.
In leaving the official cash rate unchanged at 2.5% in September the Reserve Bank announced that its decision was appropriate given the current state of the economy.
Reserve Bank governor Glenn Stevens said that overall economic indicators showed the economy growing at below trend as a result of continued adjustments to the slowdown in the mining resources sector.
According to Australian Property Monitors (APM), the median Sydney house price will exceed $700,000 by 2014.
Rising Sydney property prices means that for many first home buyers they will need a deposit of at least $140,000 to avoid paying hefty Lender’s Mortgage Insurance (LMI), incurred when the deposit is less than 20% of the total property purchase price.
Australian bond yields have rocketed to a 15-month high as a direct result of a rout in global debt markets, as reported by the SMH. Heavy selling of Australia’s 10-year bond market resulted in future prices falling 22.5 ticks.
The weakened Australian dollar added to investor caution as the Reserve Bank of Australia (RBA) is less likely to reduce cash rates. The prices have lost 57 ticks since the US Federal Reserve announced it is likely to reduce its bond buying program in the light of a stronger US economy.
The latest housing finance data released by the Australian Bureau of Statistics (ABS) shows a mild improvement in the economy and housing market, according to a recent report by The Age.
Despite home loan approvals rising for April, the 0.8% increase in owner-occupied housing finance revealed by the ABS was much lower than the 2% anticipated by the majority of leading economists.
Australians currently considering a home loan are faced with some very enticing offers as all of the big major banks cut fixed-rate home loans. The banks are waging an all out mortgage war, reports the Sydney Morning Herald.
Examples of rate cuts include HSBC with two-year fixed home loans, and Westpac’s intentions to cut three and five-year fixed rate home loans.
Australian housing finance data released for April was much lower than leading expert economists, surveyed by Bloomberg before the release of the Australian Bureau of Statistics (ABS) figures, had expected.
The ABS data revealed that home loan approvals during April 2013 only increased by 0.8% after being seasonally adjusted. The numbers are only slightly higher than the 48,071 home loan approvals stated in official data for March.
Australia’s financial reputation is taking hits from international ratings agencies, indicating some commentators believe a property crash is long overdue.
Australia is one of the few countries in the world to have a property crash-free record. Nonetheless, a number of global agencies and big name players in global property and finance world insist a major property market disaster may be inevitable, according to a report by BusinessDay Money.