As a roaring spring begins, where are home prices headed?
It’s a busy weekend for Australian residential property as confidence returns amid steadying interest rates
It’s a busy weekend for Australian residential property as confidence returns amid steadying interest rates
Spring is here and so too is one of the busiest auction weekends of the year, with vendors feeling confident and buyers out in force – a trend economists expect to continue.
Research firm CoreLogic reports a whopping 2401 homes are set to go under the hammer across the country on Saturday, up 5.4 percent on last weekend and the third largest volume of 2023 thus far.
“Auction activity across Sydney is set to exceed 1000 for the second time this year, with 1010 homes currently scheduled to go under the hammer this week… up 16.5 percent,” CoreLogic economist Kaytlin Ezzy said.
Strong momentum in property markets continues to defy expectations.
About this time last year, most pundits were predicting steep price falls throughout 2023 on the back of soaring interest rates.
Instead, values rose for the sixth consecutive month in August, up 0.8 per cent nationally and now 4.9 per cent higher since bottoming out in February, data released today shows.
Sydney has led the recovery trend, with a rise of 8.8 per cent since prices found a floor at the start of 2023, while Brisbane has also seen values jump 6.2 percent in that time.
Cameron Kusher, director of economic research at data house PropTrack, said the “better-than-expected price growth” had reversed virtually all the declines seen in the backend of 2022.
“Property prices have increased despite rising interest rates and reduced borrowing capacities,” Mr Kusher said.
“From here, the direction of the housing market will likely be influenced by the volume of housing stock available for sale. Low volumes of new and existing properties persisted In June, but this may soon change.”
PropTrack’s newest Property Market Outlook report has forecast national home prices to be between 2 percent and 5 percent higher by the end of the year.
It is a marked turnaround on a previous prediction of a fall of between 7 percent and 10 percent, Mr Kusher said.
“Forecasts for 2024 are considerably more difficult, given the uncertainty of many factors. At this stage, we are forecasting modest price growth in 2024.
“However, significant changes to the overall economic performance, interest rates or lending conditions, could result in vastly different price growth outcomes.”
He predicts prices nationally could be up to 3 percent higher by the end of 2024, with modest growth across most capitals, including up to 2 percent in Sydney and up to 3 percent in Melbourne.
Domain’s recently released Forecast Report is a tad more optimistic, predicting the housing market will be in a “well-established, steady recovery” by mid-next year.
“House prices in Sydney, Adelaide and Hobart will record the largest gains,” the report predicts.
Forecasts are for house prices in Sydney to end the current financial year up to nine per cent higher, with modest growth in Melbourne of up to two per cent and a rise in Brisbane of up to 4 percent.
“House prices in Sydney, Adelaide, Perth and the combined capitals will be at a new record high [while] Brisbane house prices will be close to a new record high,” the report predicts.
Strong population growth is set to put “greater and more immediate pressure” on housing demand, which sees an additional 300,000 dwellings needed to meet needs.
“Typically, overseas migrants rent on arrival, but, with a tight rental market Australia-wide, we may see some arrivals transition to home ownership sooner as they seek more stable housing alternatives.
“This is occurring at a time the construction industry has experienced unprecedented headwinds – skills shortages, supply chain disruptions, and soaring construction costs.”
While prices are expected to rise, affordability pressures, high interest rates and restrictive serviceability buffers will contain the pace of growth, the report reads.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
The Republican nominee says it would help bring down home prices, though these buyers account for a fraction of U.S. home sales
Former President Donald Trump said he would ban undocumented immigrants from obtaining home mortgages, a move he indicated would help ease home prices even though these buyers account for a tiny fraction of U.S. home sales.
Home loans to undocumented people living in the U.S. are legal but they aren’t especially common. Between 5,000 and 6,000 mortgages of this kind were issued last year, according to estimates from researchers at the Urban Institute in Washington.
Overall, lenders issued more than 3.4 million mortgages to all home purchasers in 2023, federal government data show.
Trump, the Republican presidential nominee, made his comments Thursday during a policy speech to the Economic Club of New York in Manhattan.
Housing remains a top economic issue for voters during this presidential election. Rent and home prices grew at historic rates during the pandemic and mortgage rates climbed to levels not seen in more than two decades. A July Wall Street Journal poll showed that voters rank housing as their second-biggest inflation concern after groceries.
Both major candidates for the 2024 presidential election have made appeals to voters on housing during recent campaign stops, though the issue has so far featured more prominently in Vice President Kamala Harris ’s campaign.
Trump has blamed immigrants for many of the nation’s woes, including crime and unemployment. Now, he is pointing to immigrants as a cause of the nation’s housing-affordability crisis. Yet some affordable-housing advocates and real-estate professionals said Trump’s mortgage proposal would fail to bring relief to priced-out home buyers.
“It’s unfortunate that given the significant housing affordability crisis that is widely acknowledged across most partisan lines, we are arguing about a minuscule segment of the market,” said David Dworkin, president of the National Housing Conference, an affordable-housing advocacy group.
Gary Acosta, chief executive of the National Association of Hispanic Real Estate Professionals, a trade organization, said, “It’s just another effort to vilify immigrants and to continue to scapegoat them for any issues that we have here in the United States.”
A Trump campaign spokeswoman didn’t immediately respond to a request for comment.
Undocumented immigrants in the U.S. can obtain an obscure type of mortgage designed for taxpayers without Social Security numbers, most of whom are Hispanic. The passage of the USA Patriot Act of 2001 allowed banks to use identification numbers from the Internal Revenue Service as an alternative to Social Security, extending a number of financial services to people without legal status for the first time.
Mortgage loans for undocumented immigrants are typically higher interest and borrowers include legal residents who have undocumented spouses, Acosta said. Lenders include regional credit unions and community-development financial institutions.
In his speech, Trump said that “the flood” of undocumented immigrants is driving up housing costs. “That’s why my plan will ban mortgages for illegal aliens,” he said.
Trump didn’t elaborate on how he would enact a ban on such loans.
Though mortgages for undocumented people living in the U.S. are relatively rare, residential real-estate purchases by foreign nationals are big business , especially in expensive coastal cities such as New York and Los Angeles. These sales have declined in recent years, however.
Close to half of foreign purchases are made by people residing abroad, while the other half are made by recent immigrants or residents on nonimmigrant visas, according to an annual survey by the National Association of Realtors. Many affluent foreigners buy U.S. homes with cash instead of obtaining mortgage financing.
In his Thursday speech, which focused mostly on other economic matters such as energy and taxation, Trump proposed other measures to bring down housing costs, including cutting regulations for builders and allowing more building on federal land. Similar ideas appeared in the housing policy outline Harris released in August .
The former president has spoken on housing-related issues in speeches at other recent campaign stops, including in Michigan last month, where he touted his administration’s 2020 overturn of a policy that had encouraged cities to reduce racial segregation .
“I keep the suburbs safe,” Trump said. “I stopped low-income towers from rising right alongside of their house. And I’m keeping the illegal aliens away from the suburbs.”
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.