The moderation in growth was due largely to a slightly negative April result in Australia’s largest capital city housing market, Sydney, where dwelling values were broadly flat (rounded up from – 0.04%) over the month.
The April results mark the weakest monthly change in dwelling values across the Sydney property market since December 2015, when CoreLogic reported a 1.2% fall in Sydney dwelling values.
The soft reading comes after dwelling values have risen by 75.1% over the past five years, an annual rate of growth of 15% over this period.
In a city like Sydney, where more than 50% of new mortgage demand has been from investors, a tighter lending environment for investment purposes has the potential to impact housing demand more than other cities.
The latest housing finance data from the Australian Bureau of Statistics (ABS) showed that investors comprised 57% of new mortgage demand in New South Wales, excluding refinanced loans.
The number of property listings relative to a year ago has also edged higher in several cities including Sydney.
The last time Sydney listing numbers increased year-on-year was early September 2016.
With mortgage rates remaining well below the long-term average, we should see a continuation of support for the housing market and investment demand.
On the flipside, this current growth phase has been running for almost five years across Sydney and Melbourne; it is rare for an upswing in the cycle to be sustained for this long and at such high growth rates.
Affordability constraints are very much evident across Sydney, and to a lesser extent Melbourne which would be progressively impacting on housing demand.
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Brisbane Housing Market Update [Video] – May 2017
from Property UpdateProperty Update http://propertyupdate.com.au/sydney-housing-market-update-video/
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