Buy now, pay later: The busiest year in Australian property was also the riskiest
Kanebridge News
Share Button

Buy now, pay later: The busiest year in Australian property was also the riskiest

Since the surge in buyer activity, average monthly mortgage payments have increased almost 50 percent, new data has shown

By KANEBRIDGE NEWS
Tue, Aug 27, 2024 12:38pmGrey Clock 2 min

Investment in property might be seen as a long term prospect but the latest figures from CoreLogic suggest not everyone is in it for the long haul. Property sales hit a peak in 2021, with an estimated 549,000 homes sold that year, new data has shown. That means that year, 5.3 percent of all property was bought.

The Australian property data service also revealed a whopping 20 percent of residences were purchased in the past five years. Brisbane had the highest rate of stock turnover in the past five years at 24.6 percent.

The CoreLogic report by head of research Eliza Owen noted that the upswing in buying in 2021 was at one of the riskiest times in the market in recent years, with super sized mortgages to match.

“One could argue then that the many Australians who purchased in 2021 were incentivised into the market at a higher-risk time,” Ms Owen said in the Pulse report. “Average loan sizes reported by the ABS escalated quickly (up almost 18pc over the year), and buying close to the market peak means there may be higher risk of low capital returns or value loss in the face of higher debt costs.”

However, the report said home values had increased by 7.6 percent since the end of 2021. Those who waited a year and purchased during the brief market dip in 2022 fared better, experiencing almost double the capital growth returns. Those who bought since then have been slugged with consecutive interest rate rises as the cash rate increased 13 times over 15 months from 0.1 percent in April 2022, stabilising at 4.35 percent since November 2023.

While Roy Morgan research in April revealed that 30.8 percent or 1,560,000 mortgage holders are at risk of mortgage stress, most are weathering the storm.

“It is likely most recent home buyers are coping with the stark change in mortgage rates and economic conditions,” Ms Owen said in the report. 

“In the March Financial Stability Review, the RBA reported around 1 percent of home loans were in negative equity, and APRA reported just 1.6 percent of housing loans had mortgage repayments that were past due. 

“Loan to valuation ratios for new mortgages generally trended lower through 2021, and over 90 percent of borrowers had at least a 10 percent deposit for new loans secured that year, providing a buffer against falling home values.” 



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Property
The ‘new frontier’ in Australian property is not where you think
By KANEBRIDGE NEWS 04/12/2024
Property
Steam comes out of the market as Australian property values cool
By KANEBRIDGE NEWS 02/12/2024
Property
Property of the week: 58-60 Carrington Road, Wahroonga
By Kirsten Craze 29/11/2024
The ‘new frontier’ in Australian property is not where you think

Buyers are moving there in their droves while existing residents know they’re on a good thing

By KANEBRIDGE NEWS
Wed, Dec 4, 2024 2 min

The Australian housing market is rapidly evolving, with new research revealing changing activity in regional and city areas.

The latest Regional Movers Index from the Commonwealth Bank showed the exodus from Australian cities to the regions is significantly exceeding pre-COVID movements, sitting at 19.8 percent higher. Even more revealing is data which showed relocations are 1.8 percent up on the average recorded during the height of the lockdowns. At the same time, people in regional areas are staying put.

The report is a partnership between the Commonwealth Bank and the Regional Australian Institute. RAI CEO Liz Ritchie said the regions have become the permanent home of choice for more Australians.

“The inter-regional migration index —which tracks regional to regional relocations — has fallen by 5.1 percent, suggesting that more regional residents are content to stay where they are. With the continuing strong jobs market across regional Australia, increasing city property prices and ongoing cost-of-living pressures, it’s no surprise the regions remain desirable,” Ms Ritchie said. 

She said this had significant implications for planners, with a better understanding of infrastructure needs required by planners.

“Regional Australia is truly the nation’s new frontier. There are so many opportunities in our regional communities, but likewise we know there are challenges. Housing for example remains a key ongoing concern in many communities,” she said. “Regional Australia is growing and for that to continue we need adequate foundations. The time to lay them is now.” 

Among the areas to benefit from this shift over the past quarter was the Hunter Valley city of Maitland in NSW which saw a 3.4 percent increase in net migration from the cities and other regional areas. Long seen as the less desirable locale in the wine growing region, Maitland has attracted more buyers looking for an affordable home with lifestyle benefits. CBA Executive General Manager Regional and Agribusiness Banking Paul Fowler said it was an area on the rise.

“There is significant development happening around Maitland, with extensive land releases for residential, industrial, commercial and retail fuelling strong employment and construction industry opportunities,” Mr Fowler said.  

“Maitland is also set to benefit from major investments in the area including the nearby Newcastle Airport which will welcome international flights from 2025, further enhancing the region’s accessibility and economic profile.”   

And while Melbourne property prices continue to experience a lull, it’s a different story outside the capital, with regions closer to main city centres performing particularly well.

“A move to regional Victoria remains on trend among those relocating, with the state’s regional areas experiencing the largest surge in popularity in the 12-month period to September 2024, with its share of net regional inflows rising from 21 percent to 30 percent,” Mt Fowler said. “Trending scenic LGAs like Queenscliffe on the coast, as well as Moira, Wangaratta and Strathbogie located further north, offer attractive and more affordable lifestyle opportunities for many Australians. 

“With more corporate employers setting up or relocating to Geelong, Queenscliffe’s proximity to Greater Geelong and the Melbourne CBD means more regional Australians can enjoy diverse employment opportunities while living in a beautiful location with enhanced lifestyle opportunities.” 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Property
The ‘new frontier’ in Australian property is not where you think
By KANEBRIDGE NEWS 04/12/2024
Money
This Company Won Big With Bitcoin and AI. Why It’s Now Favoring One Over the Other
By Avi Salzman 02/12/2024
Lifestyle
Chinese EV Demand Sets Record. December Should Be Huge
By Al Root 02/12/2024
0
    Your Cart
    Your cart is emptyReturn to Shop