Conditions easing for buyers

Conditions easing for buyers

Home buyers may be relieved by the latest RP Data findings, which highlight what stage the Australian property cycle is at.

While cheap home loans have made it easier for borrowers to obtain affordable finance in order to secure their property interests, population growth, domestic and foreign investor interest and limited housing stock in pockets across the country have made the dream of homeownership slightly more challenging for some.

Therefore, news that the market has cycled past its peak growth phase could lead to a softening in house prices that's sure to be welcomed by buyers.

Following "two years of strong values growth" across the country, there is evidence of the market moving beyond its peak growth phase, according to a June 19 statement from RP Data's Tim Lawless.

Investment finance commitments have hit record highs, recording a 2.3 per cent rise for April. With $11 billion of housing finance commitments taken on by investors in April, this accounts for a whopping 39.4 per cent of total housing finance.

Mr Lawless elaborated on these Australian Bureau of Statistics figures, pointing out that the record levels of investment lending could start becoming unsustainable.

In fact, Mr Lawless has suggested that banking sector regulators may alter their attitudes about such activity, given the high proportion of investors to homeowners.

That's not to say that tools haven't been put in place to address the rife speculation present in a lot of fast-growing areas.

"Compared with this time last year, investors may now find it harder to secure a property with changes to solid investment fundamentals, particularly in the cities where capital gains have been significant and yields are low," Mr Lawless explained.

If further action is taken to ease investment activity and housing stock keeps up with the frenetic pace in the likes of Melbourne and Sydney, home buyers could find themselves in a much better position to obtain the right property at the right price in the months to come.

Image credit: Frits Ahlefeldt-Laurvig

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