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The head of a leading brokerage predicts house hunters will be well positioned to make their dream purchase this financial year, as weaker property prices improve affordability across Australia’s major cities.
Quoting the latest industry data, chief executive of Aussie Home Loans, James Symond, says that while sluggish wage growth and ever-tightening lending conditions are still cause for concern, the easing or reversal of price growth in some markets will be a “welcome change”.
While Hobart, Adelaide and Melbourne have recorded stronger performance over recent months, nationally, home prices have fallen for 10 consecutive months; the largest decline since September 2011. This has created new pockets of standout performance for investors and buyers alike.
Symond explained, “The Housing Industry Association’s recent report showed easing property prices have improved affordability in five of Australia’s capital cities in the June 2018 quarter, with Hobart, Adelaide and Melbourne the exceptions.
“Perth continues to be Australia’s most affordable capital city and represents excellent value for first home buyers and investors. I expect we will see a return to growth in that market very soon as buyers capitalise on its market conditions,” he added.
Aussie Home Loans’ own independent research also supports the trend, confirming an increase in serviceability levels over the last 25 years.
The proportion of annual household income required to service a mortgage (based on a 20% deposit) is currently tracking at 36%, up from 27% in 2001, but down from its peak of 51% of annual income in June 2008.
“A new report released this week by Deloitte Access Economics shows that mortgage brokers make mortgage markets work better, providing information and improving choice and competition for borrowers. It’s for these reasons and more that there’s never been a better time for a borrower to use a mortgage broker. Brokers intimately know the various lending criteria and policies of different lenders, and so can help borrowers secure the right loan faster and easier than going it alone,” Symond added.
