Experts in Australia are predicting more declines for the housing industry in 2019. The effects on the economy are still yet to be seen, but some are expecting a hard landing for the market in the coming months.
CoreLogic's latest Housing Market Update showed that the national housing market is down 3.5 per cent from its last peak. In addition, the organisation's research showed that the value of dwellings nationally hasn't seen this much decline since 2012.
Sydney and Melbourne, the two largest cities, continue to see the greatest falls, and that trend is likely to continue into the new year.
Impact on the economy The housing market decline that continues in Australia may bring the overall economy downwards. The Organisation for Economic Co-operation and Development (OECD) said recently that economic growth may be in trouble because of these problems.
The OECD advised financial professionals to be prepared for a 'hard landing' for the housing market, even though their research shows that quality of living, health and education remain positive across the country
Housing affordability While housing prices are decreasing, the average income across the nation is increasing, CoreLogic data shows. So, this means that housing affordability is becoming more of a reality, and first home buyer numbers have increased, especially in New South Wales and Victoria.
As housing affordability continues, these new buyers will continue to benefit from these conditions in the new year.
Looking to 2020 A chief economist from UBS said that the market downturn is likely to continue throughout 2019 and into 2020, ABC News reported. The official also said that Australia may face its longest housing market downturn in history.
This could be because the downturn is caused by banks aiming to slow the investor market by tightening credit, ABC said. In past downturns, causes were interest rate hikes or financial crises, making the current downturn likely to keep going longer than those previous cases.
In an uncertain market, it's important to weigh up your options and keep an eye on upcoming trends. Whether you're a first home buyer or looking for an investment property, there are many benefits of working with a mortgage broker. To learn about the services we offer, contact us today.