So much of the Australian economy is riding on the property market, so there’s always interest in what is likely to happen next.
Today we learnt from the ABSthat investors are continuing to pile into housing, with new loan commitments rising another 1.1% in October to almost $10b. That’s near their record highs, and the value has risen each month for 12 months in a row increasing by 90% all up.
Still, the pace of the increase is slowing, with higher fixed mortgage rates among the drags.
Overall new lending for housing retreated 2.5% last month, with owner-occupier lending dropping 4.1%, extending falls that began in May. As CommBank economists noted, lending to first-home buyers is also dropping.
“Lending is a good leading indicator of dwelling prices and we expect dwelling price growth to slow in 2022 and for prices to fall in 2023,” the bank said. (See more on the ‘twilight of the housing boom’ here.)
Capital city property auctions, meanwhile, remain near the highest since at least 2008, when consultancy CoreLogic began tracking trends.
This week, some 4222 homes are expected to go on the block this week, less than 1% fewer than the 4251 auctioned last week. Only two weeks have ever had more than 4000 predicted auctions, and this latest forecast is about twice the number of a year ago.
In Melbourne, 1887 homes are scheduled to be auctioned this week, making it the third-busiest of the year. In Sydney, the 1547 planned auctions would top last week’s tally to be the second-busiest in those record (since 2008). The sales have been on the rise for nine weeks.
Auctions are less popular in most other cities, with only five homes set to go under the hammer in Tasmania, for instance.
CoreLogic, meanwhile, has also been tracking housing affordability outside the major urban centres. Guess what? It’s got a lot worse.
“In the year to March 2021, migration from cities to regions increased 5.9%, while the number of people leaving regional Australia for the capital cities declined 3.5% in the same period,” it said in a separate report out today. Homes available to buy or rent have been pushed to “extreme lows”.
“As of 28 November, the amount of for sale listings counted across regional Australia remained 36.9% below the five-year average, with just under 60,000 properties available for sale,” it said.
I suppose those looking at a tree- or sea-change (or a ti-tree change, for both) had better put it off for a while.
