Mortgage brokers in Kwinana and across the Perth metro area have heard about the so-called “housing market slowdown.” Due to a bit of a tightening of the credit process and slightly higher variable interest rates, the capital cities saw a drop of 1.4% in home sales for the quarter ending December 2015.
It appears to many that the market is shrinking, but many economists, such as the President of REIWA, feel that the Perth real estate market has not only stabilised, but is showing slight growth. Recently, a survey conducted by Yellow Brick Road (YBR) signaled good news for those who own property.
According to the survey, buying an investment property or a first home made up more than 40% of all New Year’s resolutions that were financial in nature. This indicates some pent-up demand for real estate.
For comparison, here are some of the other resolutions: 25% said they would decrease debt, 15% resolved to budget, 10% resolved to save for travel and 7% felt working on their superannuation was worth resolving. Only 2% said they were going to spend their disposable income.
What it Means to You
While there was a dip in the market the last six months of 2015 in many markets, the market is still as we have been saying for awhile now. The current combination of stagnant prices, impending market recovery and low interest rates is making housing as affordable as we can see it getting.
We see the current market as a “sweet spot” that we may never see again. Prices are due to rise. Though some are predicting one more RBA interest rate cut, a rise in rates is inevitable. We think it will become gradually tougher to enter the housing market for first home buyers or first time investors.