With fears of coronavirus lockdowns slowing down our economy, some are wondering if our property markets can continue their strong growth.
Well, I keep careful watch on housing finance figures because they are a good leading indicator of what’s ahead for our property markets.
That’s because people organise their finances 3 to 6 months before they end up buying a property.
And owner occupier home buyers propelled a surge in housing credit in June.
In fact housing credit lifted 0.7% – the most in 11 years – to be at 5.3% compare to a year ago.
While investor housing credit raised by 0.3% to be 2% higher than year ago – the strongest annual rate in three years.
So in my mind, this recent strong growth in housing credit suggests will our property markets are going to finish the year strongly.
What about the lockdowns?
Of course the prolonged lockdowns in Sydney and virus flare ups and lockdowns in other States are likely to slow the rapid pace of house price growth in the second half of 2021, yet Corelogic figures that will come out shortly for the month of July are likely to show property values have grown by 1.5% in the month of July alone, with prices up 1.8% in Sydney.
However, the lockdowns will mean Sydney’s traditional Spring selling season is likely to be pushed back into the summer months with fewer listings, auctions and sales volumes in the near term.
That said, the eventual reopening of the New South Wales economy, supported by pent up demand and record low mortgage rate is likely to trigger a sharp rebound in Sydney property market activity.
And of course the Reserve Bank has made it very clear that they won’t hike interest-rates to cool our soaring home prices.
While the Board continues to monitor for lending standards, macro prudential changes are once again likely to be the tool used by regulators should they need to cool the market.
from Property UpdateProperty Update https://propertyupdate.com.au/heres-why-our-property-markets-will-finish-the-year-strongly/
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