Three Things to look out for this Spring

Table of Contents

This article provides general information only and does not constitute personalised advice. You should obtain independent legal, financial, taxation and building advice relevant to your individual circumstances before acting on any information in this article.

This year’s busiest time for property sales is finally under way. Here are 3 things you may expect to find this spring:

  1. Fewer Investors: The Australian Prudential Regulation Authority (APRA) has put pressure on lenders and financial institutions to cut the discounts available on investment loans whilst also changing the loan to value ratios and requiring larger deposits. At the same time, Sydney’s strong capital gains and weak rental growth have forced rental yields lower and lower. The average rental yield on a house in Sydney fell to a weak 3.3% in June. Investors have started chasing higher returns elsewhere.
  2. More Home Buyers: Whilst affordability will continue to be an issue, first home buyers should benefit from subdued investor demand, particularly in areas where there is an availability of cheap apartments. On the other hand, young families are going to face intense competition from cashed up down sizers within approximately 5km – 7km of the Sydney CBD.
  3. More of the Same: Auction clearance rates have dipped over the past month and the market is changing as outlined above. However, it may be wishful thinking to interpret this as the start of a downturn. The ongoing low interest rates and strengthening demand from home buyers is likely to lead to “reasonably solid price growth” this spring according to Shane Oliver, chief economist for AMP.

If you are thinking about purchasing a property this spring, call me today on
0405 134 645 or send an email to nick@buyersdomain.com.au

© Buyer’s Domain. This article may not be reproduced without permission.

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