Greetings from Scoutable and welcome to our September Wrap Up.
I hope you are well.
CoreLogic’s national home value index rose 1.5% in September, taking Australian housing values 17.6% higher over the first nine months of the year and 20.3% higher over the past 12 months. There was positive growth in every capital city and Combined Regional for September, the September Quarter, and the year ended 30 September 2021, as shown in the CoreLogic table below.
Although growth conditions remain positive, growth has slowed from the March peak rate of 2.8%.
CoreLogic’s research director, Tim Lawless, believes the slowing growth conditions are the result of higher barriers to entry for non-home owners along with fewer government incentives to enter the market.
"With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts of the market, especially first home buyers. Sydney is a prime example where the median house value is now just over $1.3 million. In order to raise a 20% deposit, the typical Sydney house buyer would need around $262,300. Existing home owners looking to upgrade, downsize or move home may be less impacted as they have had the benefit of equity that has accrued as housing values surged.
“The slowdown in first home buyers can be seen in the lending data, where the number of owner occupier first home buyer loans has fallen by -20.5% between January and July. Over the same period, the number of first home buyers taking out an investment housing loan has increased, albeit from a low base, by 45%, suggesting more first home buyers are choosing to ‘rent vest’ as a way of getting their foot in the door,” Mr Lawless continued.
Data from the Australian Bureau of Statistics found that nationally, the average deposit needed to secure a mortgage for a first home buyer is now $106,743, an increase of 16% on January 2019. Finder's First Home Buyers Report 2021 estimates it takes some first home buyers more than a decade to save the recommended 20% deposit. A full state-by-state breakdown, including the average size of the loan, can be found below.
First home buyers may want to consider government incentives on offer to help them into the market. As part of the First Home Loan Deposit Scheme, eligible buyers can seek out a mortgage with a five per cent deposit. While this does increase the cost of the mortgage over its lifetime through interest, the gains you stand to make as the property increases in value over time could potentially outweigh the extra interest costs.
If you would like to discuss the property market further, please get in touch.
Until next month,
Kellie Landrey | Principal Buyers Agent
INTHE NEWS
HOME LOAN CRACKDOWN APPEARS IMMINENT AS TREASURER, REGULATORS DISCUSS HOUSE PRICE SURGE
https://www.abc.net.au/news/2021-09-28/home-loan-crackdown-appears-imminent-amid-house-price-boom/100496824
BUILDING APPROVALS RECORD SURPRISE BOUNCE BACK
https://www.theurbandeveloper.com/articles/australia-building-approvals-august-2021
MORE HOMES BOUGHT AND SOLD IN QUEENSLAND THAN NSW OR VICTORIA
https://www.domain.com.au/news/more-homes-bought-and-sold-in-queensland-than-nsw-or-victoria-1091643/
PROPERTY OF THE MONTH
Unit 3, 79 - 93 Oxford Street, Collingwood (Victoria)
Unit 3, 79-93 Oxford Street, Collingwood was a recent Scoutable purchase and our property of the month because we love a good warehouse conversion!
The complex is positioned 2.7km north-east of Melbourne's CBD and is within walking distance of RMIT University, Australian Catholic University and St Vincent's Hospital, along with a multitude of gardens and retail facilities making it an ideal location for owner occupiers and investors alike.
The building was built in the late 1880s, converted to a complex of 21 apartments in the 1980's. The apartment was recently renovated, comprising 174sqm of living, spread over two levels. The entry level provides an open plan kitchen / living / dining with exposed beams, 19ft ceilings and an internal courtyard. There is also a walk-in pantry, and bathroom with laundry facilities. Upstairs provides three bedrooms, one bathroom and a small study area.
The property was purchased for $1,760,000 on the 27th September.
If you'd like to know more about this property or any others, please get in touch.
