Investor sentiment impacted by skyrocketing property prices 

/ LOANSCAPE/
Investor sentiment impacted by skyrocketing property prices 

The PIPA (Property Investment Professionals of Australia) Annual Investor Sentiment Survey 2021 has shed light on what investors are thinking in response to the current property market conditions.

The steady decline in housing affordability, with the annual growth rate in housing values reaching 20.3%, has made its impact. Compared to 41 per cent from last year, 71 per cent of investors now believe prices in their state or territory will increase over the next year.

The pandemic has made remote working more commonplace and investors are looking at relocating due to housing affordability and improved lifestyle factors — such as less crowded cities and less active cases —that may be gained from living in more regional areas.

Investors are also favouring regional and coastal areas for investment purposes, with Queensland becoming the leading location for offering the most potential. 58% of investors believe so, and this is up from last year’s 36 per cent.

Compared to last year’s PIPA survey, it seems the positive sentiment gained from booming property prices has now been mitigated by increasing housing unaffordability and the recent rise in COVID cases, which has impacted investors’ willingness to enter the market.

Read More

Looming loan restrictions could mean a shift in property prices

/ LOANSCAPE/
Looming loan restrictions could mean a shift in property prices

With demand greatly outweighing supply, houses are selling well over reserve at auction and recent COVID-19 restrictions have affected property sellers’ willingness to go to market.

While this property boom strengthens some sectors of the economy, there are numerous economic implications. With houses skyrocketing in price, Australians yet to enter the market are seeing their chances of buying a property grow slimmer.

However, there is still high activity in the market for those with the capital to spare. But with higher prices comes higher property loans, as Australians are borrowing more in order to secure a property. Around 22% of all borrowers are now taking out loans that are six times larger than their annual income.

Read More

Lockdowns a knock to confidence

/ LOANSCAPE/
Lockdowns a knock to confidence

Republished from MPA.

The nation’s lockdowns are taking their toll on new home lending and the financial comfort of Australians. While the RBA remains positive, there are still concerns about the economic recovery.

The value of new home lending in Australia dropped for the first time this year in June, coinciding with the start of Sydney’s lockdown. Declining 1.6% over the month, it was driven by a 2.5% drop in owner-occupier lending – the largest fall since May 2020.

Investment lending bucked the trend, with the value of new loans to investors growing for the eighth consecutive month, rising by 0.7% in June to reach $9.19bn.

First home buyer purchases and loans for construction slowed over the month as incentives were wound back.

Read More

Market Essentials - September 2021

/ LOANSCAPE/
Market Essentials - September 2021

Welcome to Spring! Traditionally the busiest time of the year for real estate nationwide. Typically, sales and listing volumes both rise from September to November, and while buyer demand and property supply increase over the season, the impact on prices is usually marginal.

As we enter September 2021 however, a large portion of the country remains in lockdown. Demand remains high, but stock volumes are low.

Data from Core Logic shows increasing median prices in most capital cities, quick sales and continuing real estate records, and as lockdowns lift, a robust recovery should follow.

On the plus side, vendor activity is predicted to increase, bringing better listing volumes to market. Mortgage rates remain low, household savings have grown, and international borders remain closed; these factors point to increased buyer activity.

Read More

How has buying property changed during the pandemic?

/ LOANSCAPE/
How has buying property changed during the pandemic?

The COVID-19 pandemic has forced the property market to adapt, from restricted open homes, online auctions, and the switch to digital communication over face-to-face. The recent Delta outbreak has resulted in further restrictions in NSW, with Greater Sydney under lockdown since the 26th of June. While restrictions are looking to lift with NSW approaching its vaccination target, there have been some major impacts on the process of buying a property that are expected to continue temporarily.

How have the recent COVID-19 restrictions impacted property buying?

The research process remains relatively unchanged. What has changed dramatically is the ability to thoroughly inspect a property and the shift from face-to-face to digital communication.

Communication with the agent

Due to the recent COVID outbreak and resulting restrictions, buyers must make contact with the real estate agent in advance of viewing an open home. Real estate agent Rosalie Gordon believes this has resulted in open homes being more exclusive.

“We are now screening the buyer before taking them through to open homes by asking what position they are in, whether finance is approved, if they are looking to buy property for investment or as a home, and whether they have already sold their current home.”

— Rosalie Gordon

Read More

Six factors affecting property market growth

/ LOANSCAPE/
Six factors affecting property market growth

In March, the Australian housing market hit its fastest national growth rate in capital gains since 1988. Record low interest rates, heightened consumer confidence due to overperforming economic recovery, and Government stimulus measures such as the First Home Loan Deposit Scheme have spurred demand.

But there are also factors that indicate that this growth is at its peak. A continued boom is unsustainable, and markets are inherently cyclical. According to property market research firm CoreLogic there is unlikely to be a dramatic decrease in the housing market, but that its growth will slowly taper in the next few months – a change that is indicated by the following factors.

Read More