The nation’s property market is entering a transitional phase as median house price growth slows, the head of a major real estate lobby has claimed.
According to recent statistics from the Real Estate Institute of Australia (REIA), the weighted average capital city median price increased by 2.3% for houses and 2.1% for other dwellings over the September quarter.
This has slowed significantly from the 4.2% growth for houses and 3.3% growth for other dwellings seen over the June quarter. The average median house price in a capital city now sits at $698,826 and $549,145 for other dwellings.
According to REIA president Neville Sanders, the price slowdown is an indicator of a market that is beginning to ease.
“What we’re viewing it as is a bit of a slowdown in price growth and the start of a period where things are beginning to ease off,” Sanders said.
“Even the auction results recently are slowing. Now auctions only account for probably about 30% of all transactions, but they’re a good indicator of what level of buyer activity is out there and how competitive they are.”
The latest lending figures from the Australian Bureau of Statistics (ABS) reveal that APRA
's lending restrictions are finally beginning to trickle down into the investor market, with the figures showing a 6.1% tumble in the value of investor loans over November. According to Sanders, this is a positive sign.
“I think it was a good thing, you never want people to be stretched to their absolute utmost.
“I don’t think there was a huge number of people out there who were going beyond their means, but it’s just a good thing to remind people about what could happen if they’re suddenly left with a cash flow problem because they lose a tenant or they have to cover a large repair cost to a property.”
However, while Sanders says the Australian market is in a transition, he doesn’t believe there is any real chance of significant price corrections.
“There’s no evidence around that we’re going to see any sudden corrections happen.
“If you look at the last time there was severe changes we had high interest rates, high unemployment and low population growth and if you look around at the moment none of those things are present.”