Experts say that those looking to put their house for up sale in Sydney can look forward to their best opportunity in years to maximise its value. Key moves in the governmental and financial sectors have boosted the housing market after years of stagnation.
In August, according to CoreLogic, housing prices in Sydney jumped a remarkable 1.6 percent, with Melbourne not far behind. The limited amounts of stock on the market have pushed prices up, and other factors have also contributed.
Political Stability a Factor in Housing Rebound
The Morrison government’s unexpected May win has eased the marketplace. His government has committed itself to putting economic growth first, including with regard to the housing market.
Morrison’s backing of Royal Commission on Banking’s conclusions has served as a factor as well. The Royal Commission endorsed easing rules that helped to better expedite preapprovals for first time homebuyers. It also lowered criteria that previously shut out good candidates from obtaining home loans.
As Paul Biller of Biller Property in Double Bay explained to ABC, “there’s certainly a lot more confidence and there are more homes hitting the market.”
The government is expected to continue to support the creation of policies to keep the housing market moving in the right direction.
Reserve Bank of Australia Moves
The Reserve Bank of Australia’s nearly unprecedented move to drop rates to 0.75 percent has also stimulated the market. Buyers have emerged into the marketplace attracted by lower interest rates. Demand in Sydney and Melbourne as a result outpaces supply, driving up prices.
Those with variable rate mortgages, however, will likely not see their banks pass on the full interest savings.
What Future May Hold For Sydney Area Housing
Experts disagree on whether the RBA will drop rates further. Australia faces competition in this field from European central banks, some of whom have dropped their interest rates into negative territory.
Some believe that the rates have already met their floor and cannot sink any lower. Banks lending at lower rates will have difficulty earning profit at lower levels.
Most, however, expect rates to drop to 0.5 or even 0.25. Further cuts, however, are unlikely to provide a benefit to variable rate mortgage holders. Authorities assure that Australia will not follow Europe into negative rates.
Despite strong growth in Sydney and Melbourne, as well as good recovery in Canberra, most cities report little growth or even continued decline in housing prices.
Another factor that could affect Sydney’s particular housing market may emerge next spring. Sydney will see a high increase in available housing stock of all types. If the recovery remains weak, this could cause a cooling off of housing price rises.
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