There has been a decline in the number of people interested in buying property in Australia this year, according to real estate agents. The most recent CoreLogic Monthly Housing and Economic Chart Pack came out in August 2017, and has some interesting data to shed light on this situation.
The Chart Pack proves what a lot of people in the property industry have been saying of late: the numbers confirm that the number of properties advertised as for sale has dropped nationally compared to a year ago, with a similar situation being experience across the capitals. This lower number of properties available for sale has obviously affected the numbers of buyers.
100 less buyers per week at Central Coast open homes
These figures are supported by anecdotal evidence from those in real estate and property development across Australia. One real estate agent from the Central Coast NSW told us they estimate that around 100 fewer buyers attend their open house events each week.
With less property options, buyers are less likely to come to open houses, and far less likely to shop around. The profile of buyers has changed now, in comparison to the type of buyer you would see a few years ago. Buyers are now more likely to be those who really need a new property, or one trying to find a bargain, rather than people shopping around for potential investment properties or a place that takes their fancy.
But what is the root cause of these dwindling property buyer figures?
Regulatory changes wipe out buyers
The same real estate agent from the Central Coast NSW said that they have started getting fewer people at their open houses since the APRA and regulatory changes came in for foreign buyers.
APRA regulates banks in Australia, and they have put a handbrake on home lending in a few ways. They have made it more difficult for foreign buyers to invest in Australian property, by increasing mandatory regulatory charges, such as the Foreign Investment Review Board, as well as increasing surcharges for foreign investors.
Another cause of low buyer numbers is likely the bank interest-only cap that APRA also introduced. Australian banks have been encouraged to increase their reserves, and thus must limit their interest-only loans. This has certainly also impacted the number of investors looking to purchase.
A real estate agent from the Central Coast NSW told us they estimate that around 100 fewer buyers attend their open house events each week.
Various state governments have also increased land tax surcharges, as well as introduced State Government Transfer Tax (i.e. stamp duty) surcharges in the last few years, creating yet another added cost to the already intimidating cost of property in Australia.
These causes are supported by data in the August 2017 Monthly Housing and Economic Chart Pack, which shows investor credit growth is slowing while owner occupier credit growth is accelerating. Lending to owner occupiers has also continued to lift.
Another interesting bit of data in the Chart Pack shows that consumers are increasingly pessimistic about the state of the Aussie property market. In the last eight months, pessimism has consistently outweighed optimism.
With fewer properties to choose from, and increased taxes and costs associated with buying a home, it’s easy to see why.
Buying on the Central Coast
With fewer buyers in the market, opportunities are available for those ready and able to buy. The key to buying in a property market that has come off the peak is to ensure you are positioned to move quickly. That means having your finance pre-approved, which is best done with the support of a Central Coast mortgage broker like Mint Equity. We will take you through the approval process and ensure you have the confidence to make an offer when you see an opportunity arise.