It's all in the rebound
Having hit a nadir around a year earlier, property transaction levels have continued to rebound solidly, as illustrated by the latest figures from the New South Wales state government.
Transfer duty collected in NSW rebounded to $8½ billion over the year to April 2021, which is worthy of note since a switch towards a broad-based land tax has been mooted.
Overall, activity is evidently strong in the housing market.
Demand for houses is especially high, both in capital cities and regional areas, particularly popular lifestyle locations, due to:
However, demand for rental properties in oversupplied areas such as inner-city Melbourne is very subdued, with high vacancy rates and lower weekly rents making these properties a less attractive investment.
Housing credit growth is rising, and based on increased levels of enquiry from investors, we expect investor credit to continue driving the market forward in H2 2021.
The housing credit impulse points towards double digit price growth, which is in line with what our buyer’s agents have been experiencing on the ground.
The stock of interest-only mortgage has hit fresh data series low as a share of the outstanding housing loan stock by value at around 14 per cent, but we should expect new interest-only lending to rise from here, perhaps significantly.
A number of lenders may also look to move back into the self-managed superannuation fund (SMSF) lending space, so no doubt there will be a keen level of regulatory interest in the second half of the calendar year.
Stock levels: existing and residential construction
New stock listings are very healthy for this time of year, so there’s no imminent requirement for macroprudential intervention.
The supply of new dwellings is also responding well to the housing stimulus packages.
Residential construction in the detached housing sector is currently running at very strong levels right across the country - including in regional markets - although the number of attached dwelling units under construction has dropped sharply from the previous cycle highs, which may become more evident once immigration is reignited.
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