2018 has been a significant year for home buyers in Sydney. The prices of the houses have fallen by $ 1,000. The market is favorable for many buyers to acquire property at a much lower cost than 2017. However, the rates are still 60% higher than they were in 2012.
Buyers should not rush yet to buy houses as the prices are expected to fall by 10% in 2019. Craig Vardy, Australian’s head of income said that in the next 12 to 18 months prices will drop by a further 10%. Buyers should wait for the fall before acquiring a home.
Despite the market being favorable for buyers to acquire homes cheaply, the buying process might be more restricted than in previous years. Banks are now restricting the number of people who can access loans. It is a major drawback for many buyers, especially the ones with low deposits. The banks are doing valuation and checks to ensure the lender will be able to repay the mortgage.
For the lucky ones who can acquire the mortgage, the interest rates are lower. The lowered interest rates are the major contributing factors to lower prices in houses. However sellers should not blindly sell their house indiscriminately, they should consult Sydney property values to obtain the worth of their home.
Effects of the fall in prices on the market
The number of houses being listed has increased. Sellers are now massively selling their homes due to fear of further reduction in costs. The prices are expected to drop in 2019, and more sellers are striving to sell their properties before the price fall.
Australian Prudential Regulation Authority( APRA) is mainly focusing on removing interest restrictions on some banks. The banks chosen are the ones offering better lending services. The move is favorable to the buyers; the mortgages will have lower interests. However, the banks will make lower profits due to lower interests. Mortgages are the significant contributors of incomes in banks and with lower interests the benefits will be falling significantly.
Additionally, few people will be able to access the mortgages. The move of lower interests and restriction of who can obtain the house loans is disadvantageous to the banks.
The lowered prices have a positive impact on home renters. More people are settling in Sydney due to low house prices.
Although the market is favorable for buyers due to high suppliers and favorable terms of negotiations, there are fewer buyers. The buyers are few because of tighter house loans lending standard. The buyers are also evaluating the market, and with a further expected in fall in prices, they are waiting for much lower rates.
The fall in prices has both positive and negative effects. The fall occurs in a stable economic condition in Sydney. It is a great move considering the high rates of houses in 2017.
The real estate market was not favorable for buyers in previous years, but 2018-2019 is a good time for them. Although for the sellers it is not convenient for them as they will make massive losses if they sell at lower prices houses they had bought at a hefty price.