The property industry in Australia has seen a trend in what economists have predicted to be the peak in national building commencements in the past year. However, this growth has slowed down since June in what is known as the cooling period.
Housing market giant gets a blow
This has affected booming housing market giant Sydney, which has experience an all-time low in October. The median dwelling value in Sydney fell by 0.5% to $905,917. Which is an accelerated drop from the 0.1% it attracted in September. Other states have also been affected such as Darwin down by 0.7% and Perth down by 4.4%. The tight credit policies also proved it to be challenging for borrowers who sought financial help from lenders to secure property during this time.
According to CoreLogic the growth of 28,087 new house and 24,380 new units that begun construction in the June quarter have experienced a slump. New houses went down by 7.1% while the demand in new units went down by 6.6%.
A stabilising in building approvals
Despite the recent drop in percentages, not all is lost. The Reserve Bank of Australia (RBA) gave some much needed relief by retaining the cash rate at a record low 1.5%. With more business investments slowly coming back it saw the stabilizing of building approvals. The number of dwellings under construction that have been approved across the country sits at 216, 242, which has exceeded the long-term average of 106,774. What this essentially means is that there will be more houses for Australians to purchase, and increase in competitive prices across the property industry. However, economists predict that it will take a long time for the overall prices for houses to decrease to a more affordable level for Australians.
Steady rise from the low digits
Melbourne saw a significant increase last year at 12%. It has seen a steady rise maintaining a 0.5% to $710,420. Brisbane followed close by with 0.2% to $490,525, and Hobart at 0.9% to $396,393. Other places were not as lucky experiencing a drop. Darwin fell 1.6% to $437,910, while Adelaide and Perth were flat at $430,303 and $462,624.
Dwelling values continue to stay in the positive
There are approximately 10 million dwellings in Australia, and 500,000 change hands every year. It comes as no surprise then that the dwelling values continue a positive rise nationally at a 0.2% growth rate in September alone.
These property statistics change from region to region, with some rising out of the property slump whilst others see no changes at all. However, the overall property market has reached a relatively stable state on safe ground, and shows no sign of breaking.
Building commencements strengthening
CoreLogic recent data on the year on year change in house and unit commencements across all states, revealed the following states as having experienced the highest building commencements:
|Building Commencements from July Quarter 2017|
The trend estimated that the number of total dwellings approved rose in September by 1.8% and continue to rise. Furthermore, houses that were approved in the private sector rose by 0.7% in the same month. Private sector dwellings excluding houses also rose by 3.2%.
Should you decide to invest in property it is always best to speak to a professional mortgage broker who can assist you in; breaking down the numbers for you, connecting you to possible lenders, and choosing something that is suitable for your budget.