AS SEEN IN THE DINGLEY DOSSIER
It looks like 2015 will go down in history as the end of this property price boom in Melbourne and Sydney.
This does not mean the often media hyped impending doom / property crash is upon us! Though I am sure we will continue to see occasional headlines in the tabloid media to that effect. What it does mean is that the unsustainably high capital growth we have been seeing, particularly in Sydney, is at an end.
The Australian Prudential Regulation Authority (APRA) has played a large role in this, with regulatory changes imposed on banks directly impacting buyer ability to borrow, and interest rates.
It is interesting that the Reserve Bank has not increased interest rates since November 2010, and has not changed the cash rate since May 2015. Yet the four major banks have all increased interest rates for residential property loans over the past 4 months by a minimum of 0.15%, up to as much as 0.47%. Those increases apply to all existing and new loans, and are a direct result of APRA market intervention.
Dingley Village property performance is typical of the overall market, with individual segments of the local market remaining extraordinarily strong. It is true to say we are seeing excellent sale prices on occasion, and also excellent buying opportunities on occasion.
So where is the market moving to in 2016? I was asked this question by a local client last week. He is in the market to buy, and considering potential market movements. Should he buy now before the market jumps ahead again? Should he wait for the often predicted market crash to pick up a bargain?
This is of course crystal ball gazing, with no absolute answer. However for what it’s worth, I see 2016 as a steady year for property. APRA has achieved its aim of slowing investor lending and unsustainable property price growth. The rate of growth has been slowed, however there is no reason under current economic conditions to expect a crash.
My answer – Forget outside influences, look for your new home and buy when you find it. Do not wait for bargains which may never come, do not be pressured into buying quickly.