Ray of light on hori­zon for real es­tate in­vestors

The Western Star - - Moneyhq Saver - AN­THONY KEANE

A PROP­ERTY price turn­around is one of sev­eral fac­tors likely to en­cour­age real es­tate in­vestors in the next six months.

As new data sug­gests, the na­tional prop­erty down­turn looks set to bot­tom out soon and 2020 may be the first year of across-the-board house price growth in state cap­i­tal cities since 2013.

How­ever, many in­vestors will still find fi­nanc­ing a prop­erty dif­fi­cult.

Metropole Prop­erty Strate­gists CEO Michael Yard­ney said house prices might fall for the next cou­ple of months but should be flat or higher by De­cem­ber, with 3-5 per cent growth tipped for most cap­i­tals next year.

He said hous­ing mar­ket mo­men­tum was ben­e­fit­ing from:

• TWO IN­TER­EST rate cuts in two months;

• IN­CREASED in­vestor con­fi­dence af­ter the Coali­tion’s elec­tion win stopped La­bor’s new taxes;

• REG­U­LA­TORS to ease banks’ as­sess­ment cri­te­ria from Au­gust;

• BANKS no longer need to as­sess home loan applicatio­ns us­ing a min­i­mum in­ter­est rate of 7.25 per cent to de­ter­mine a bor­rower’s abil­ity to ser­vice the loan;

• TAX CUTS set to flow to house­holds from this month;

• FIRST HOME buy­ers re­turn­ing to the mar­ket and buoyed by gov­ern­ment in­cen­tives.

“Prices are not go­ing to boom any time soon, but the prop­erty pes­simists who fore­cast sig­nif­i­cant falls in prop­erty val­ues will again be proven wrong,” Mr Yard­ney said.

“While in­ter­est rates have fallen to historic lows and mort­gages may be more af­ford­able, many in­vestors will still have dif­fi­culty bor­row­ing funds to in­vest be­cause of the bank’s stricter lend­ing cri­te­ria, in­clud­ing more care­ful scru­tiny of per­sonal ex­pen­di­ture.”

Realestate.com.au chief econ­o­mist Nerida Con­is­bee said ac­cess to fi­nance for in­vestors was im­prov­ing, but was still tough.

“If you are look­ing to buy, make sure you have preap­proval in or­der,” she said.

Ms Con­is­bee said it ap­peared that Aus­tralia’s two big­gest hous­ing mar­kets, Syd­ney and Mel­bourne, were start­ing to turn around.

“Things are very dif­fer­ent to where they were a cou­ple of months ago,” she said.

“The Coali­tion’s win means tax in­cen­tives are still there, we’ve had a cou­ple of rate cuts and there’s tax cut stim­u­lus.”

The lat­est CoreLogic fig­ures show an­nual house price falls of more than 9 per cent in Syd­ney, Mel­bourne, Perth and Dar­win for the 2018-19 fi­nan­cial year.

Bris­bane was down 2.6 per cent and Ade­laide dropped 0.3 per cent, while Hobart rose 2.9 per cent and Can­berra went up 1.4 per cent.

CoreLogic head of re­search Tim Lawless said data for the past month sug­gested the down­turn was run­ning out of steam.

“The im­prove­ment in hous­ing mar­ket con­di­tions over the first five months of the year has largely been or­ganic,” he said.

“How­ever, since mid-May there has been a raft of an­nounce­ments that should pro­vide a fur­ther pos­i­tive flow through to hous­ing de­mand.”

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