Very sad situation when young Families cannot afford to buy a home
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Very sad situation when young Families cannot afford to buy a home
Australian housing prices rise at a rate not seen since 1989
According to CoreLogic’s national home value index prices rose another 1.5% in September 2021 making Australian housing values 17.6% higher over the first nine months of 2021 and 20.3% higher over the past 12 months. The annual growth rate is now tracking at the fastest pace since the year ending June 1989.
The monthly change in housing values remains positive across every capital city and state regions, with regional Queensland at 1.7% leading September’s capital gains.
Growth conditions are positive, and it is clear the housing market moved past its peak rate of growth in March when national dwelling values increased by 2.8% and since then the monthly rate of growth has eased back to 1.5%.
CoreLogic’s research director, Tim Lawless, believes the slowing growth conditions are the result of higher barriers to entry for non-homeowners along with fewer government incentives to enter the market.
Housing prices are rising much faster than household incomes and saving a deposit has become impossible for many Australians, including 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.
Mr Lawless said “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,”
Despite worsening affordability, house values are still generally rising faster than unit values; a trend that has been evident throughout most of the COVID period to-date, especially across the capital cities.
We believe something needs to be done to help struggling Australians, or they will become tenants to wealthy landlords and never be able to own their own home!
