19 Jul Australian Real Estate Markets in 2019
The real estate market in Australia has seen some massive changes over the last few years. After decades of continual growth, 2017 saw the first signs of a downturn in housing prices. With slow wage growth and increasing debt, buyers could no longer manage the prices supported in earlier decades. By mid-2018, the combined capital 5 city property market had declined by 1.3%. This trend has continued throughout 2019, though mortgage marketing consultants estimate that the signs of a downturn are slowing.
One thing to keep in mind is that these prices are variable by state. Hobart is still showing significant increases in property prices, an estimated 8.4% boost in 2019. Increased values of about 1% have also been seen in Canberra and Adelaide, with an almost insignificant increase of 0.1% observed in Brisbane. However, all other capital cities are showing declines. In terms of declines, the drop in Sydney housing prices has been most severe at 5.9% over the last six months. Darwin and Perth are tied with a drop of 3.6%, while Melbourne is showing housing price declines of 1.5%. Mortgage broker marketing is becoming steadily more challenging in the face of these shifts in the market.
Although there are clear price declines in Sydney and Melbourne, the trend is less severe than projections suggested. Other capital cities across Australia are either stabilising or beginning an upturn. One bit of good news from the Financial Services Royal Commission in February were more stringent requirements placed on loans, reducing investment rates. This means fewer buyers and less competition. In order to keep the market flowing, sellers will be forced to stabilise or lower prices. While these new conditions are becoming established, buyers can expect the approval process to take longer.
It’s essential for brokers to implement solid mortgage broker marketing strategies, as a review into whether trail commissions should be kept from 2020 onwards is to take place. The independence of mortgage brokers and their ability to ensure that the borrowers’ best interests are put first are key. As a value proposition, this carries significant weight.
Projections suggest that the market will stabilise to some degree by the end of 2019, providing more security for both buyers and sellers. In the current climate, the key is to arm yourself with the expertise and experience you need to make informed decisions. If you’d like to know more, feel free to contact us. At 101 Things, we’re dedicated to helping you grow leads and boost your profit.