Most of sydneysiders are curious about property market news as its dropping down since august last year and still dropping.but what is really happening why prices are dropping in Sydney and what is the reason behind it.
Lets find out 🧐
In 2001, the median Sydney house price was 5.8 times the median household income; now it is 8.4 times. All regions have seen a massive decrease in affordability.
Most of the people who have owned a house for some time suggest that actually things were tougher in the old days because interest rates were much higher.
In the 1990s interest rates were 17% but the cost of paying off a new home loan has stayed around the 25% of household income level for much of the past 30 years. In the current housing market, even the low interest rates are not doing much to help out in the long-term meaning is that fewer Australians are paying off their mortgage. 20 years ago 68% of households aged 55-64 owned their home outright; now it is just 42%.. The issue is not simply linked to age. Income has become a key determinate of housing affordability.
As we know the sydney market prices are dropping juss because the property prices reached to the top in 2016. General public were encouraged to buy property due to low interest rates, govt grants, fear of missing out, stamp duty concessions, low initial deposit, expected growth, First home buyers benifits & interest only loans, flexibility from APRA, Foreign buyers were encouraged to buy etc etc
But now things have changed,
-APRA intervention on credit policy
-Tighten loan policy for investors
-Stamp duty surcharge increased from 4% to 8%. For foreign investors.
-Credit policy regulations by RBA.
-Construction side of the housing market is also on the slide due to high numbers of apartments approvals. Etc
-The drop was almost entire due to the volatile apartment sector.
Sydney’s average house prices remains well over $1 million and Increased supply of apartments has done little to bring prices down, according to Shelter NSW
Expert says, the best way to address affordability in the long term was to increase the supply of townhouses, terraces and mid-rise apartments in middle ring suburbs, 10-35 kilometres from CBD to encourage first home buyers and investors.
In NSW, government has released a suite of housing affordability measures, including abolishing stamp duty for first-home buyers on existing and new homes up to $650,000 and doubling the foreign investor surcharge. Which helped many FHB to get into the market.
If you have any queries regarding property feel free to contact me.. I might have better understanding of all your real estate needs when Buying, Selling, Renting or Investing.
Source: Australian Housing Market