Home prices are expected to post solid gains this year despite recent signs of affordability constraints, with investors now taking the reins.
ANZ Senior Economist Felicity Emmett said the housing sector remains in good shape even with recent lockdowns and restrictions as the Delta variant of COVID-19 threatens the nation .
According to the ANZ forecast, house prices are expected to increase by just over 20% on average in capital cities this year.
"We still expect some slowdown in price growth over the next few months, due to slightly higher mortgage rates, lower affordability and the potential for macroprudential tightening," Mrs Emmett said.
The latest growth in housing finance consolidates this prospect.
As the owner-occupiers, who were the first drivers, began to withdraw, investors began to reclaim their space in the market.
In fact, in the six months leading up to June, investor loans increased 55% and more than doubled since June of last year.
The moderation of the homeowner segment is explained by the decline in first-time buyers, whose segment saw a 3% drop in loans in the first six months of the year.
"Affordability constraints are biting now, and these are likely to see first-time home buyer loans continue to decline," Ms. Emmett said.
A recent report from CoreLogic showed that housing affordability has deteriorated as prices soar.
This has already started to cool the boiling markets, with price gains slowing slightly in July.
Rental markets are strengthening
Perhaps one of the reasons investors are returning is the vigorous recovery in rental markets.
The recovery in rental markets has relied on growing demand for housing, as vacancy rates almost below decade indicate.
Ms Emmett said the recovery is not confined to regional areas like it was before.
“The market is now showing widespread strength,” she said.
“The strong economic recovery and the rapid reduction in unemployment are likely to support the rental market. "
Even the units segment, which has been hit hard by the COVID-19 pandemic, has already caught up with the recent recovery after a significant slowdown last year.
"Rents in the capital have risen sharply in recent months, helped by a robust recovery in Sydney and, to a lesser extent, Melbourne," Ms Emmett said.
“This force is largely driven by the unit markets in each city. "
Construction occupied until next year
ANZ predicts that construction activity will remain high until the end of the year.
It will be supported by the remaining impact of government incentives.
"Very low interest rates and continued tax support for home buyers are expected to support housing demand in the future, although low population growth will be a barrier," Ms. Emmett said .
While building approvals have already started to decline, a significant amount of construction activity is already underway, which keeps home builders busy for the remainder of 2021 and into 2022.
"Once this pipeline dries up, construction activity is expected to decline, although low mortgage rates and rising apartment approvals are expected to cushion the fall." "
Top Suburbs:
rockville
,
trotting park
,
Westbrook
,
sth toowoomba
,
western wodonga
Get Help With Your Real Estate Investment
Do you need help finding the right loan for your investment?
When investing in real estate it is important to make sure you have no only from the lowest possible rate, but also have the loan features to suit your needs.
Just fill out a few details below and we will then arrange for a local mortgage broker contacts you and determines the characteristics or types of loans that suit your needs. We'll even help you with the paperwork. In addition, an appointment is free.
We value your privacy and take all your information seriously – you can check
our privacy policy here
