Home Buyers in Driver's Seat in Current Housing Markets

Lower housing values are becoming increasingly attractive to first home and prospective buyers previously priced out of the market.

Online bank ING, Australia’s fifth largest home loan lender, is the latest to cut rates on several fixed home loans for owner-occupier customers paying principal and interest, following recent cuts made by CBA, NAB and Westpac.

The move follows a recent report from credit ratings agency Moody’s analytics forecasting increasing competition amongst banks scrambling to seduce home loan customers with lower interest rates amid the slowing housing market.

In the coming months Corelogic research analyst Cameron Kusher expects declines will lead to further falls in asset values.

“While values are falling, the debt held against these properties is unlikely to be reducing at the same pace resulting in wealth declines for holders of residential property.”

Kusher says the lower dwelling values will be attractive to first home buyers and would-be buyers who might've been priced out of the market.

“With advertised stock levels remaining high and mortgage rates tracking around the lowest level since the 1960s, and potentially moving even lower later this year, active buyers are back in the drivers seat to take advantage of improved housing affordability and the low cost of debt,” Kusher said.

Related: Property Market Woes No Boon for Affordability

Cooling property prices have resulted in increased interest in premium suburbs, with Sydney’s northern beaches, inner east and Melbourne’s Middle Park and Toorak seeing high numbers of views per listing according to property search website realesate.com.au

Corelogic data reveals Melbourne’s premium inner east recorded the largest decline in values over the past twelve months down 16.1 per cent.

But while national dwelling values have now fallen 7.4 per cent from their October 2017 peak through to the end of March, Kusher says it’s important to understand the context in terms of how much this equates to in dollars.

“Based on the median dwelling value at the time of the market peak, a 7.4 per cent fall in national dwelling values translates approximately into a $40,590 decline in dwelling values,” he said.

Across the capitals...

Sydney values are now 13.9 per cent lower than their peak, or down $124,739.

Melbourne dwelling values have fallen by 10.3 per cent, equating to $71,404, from their peak.

Brisbane dwelling values are down $7,796 or 1.6 per cent lower than they were at their peak.

Adelaide dwelling values are down a slight 0.5 per cent, or $2,307, lower.

While Perth dwelling values, which peaked in mid-2014, are now currently 18.1 per cent, or $97,797, lower.

Hobart and regional Tasmania are the only two major regions of the country where values are yet to have fallen from peak.

Darwin dwelling values are down 27.5 per cent, or $145,980 lower.

And Canberra Values are a slight 0.2 per cent lower, or $1,071 down from their peak.