Has the Real Estate market stabilised?
Team Veye | 28 Sep 2020
When it was said by responsible authorities that maintaining the free flow of credit through the economy was critical to Australia's economic recovery plan, it was bound to have a far reaching impact on many sectors. It was further said that changes could be proposed that would remove some of the safeguards banks are required to have in place to ensure people do not enter into loans they cannot afford.
Earlier this year, when the property market was being hit by twin threats of the Coronavirus pandemic and economic slowdown, there were extreme dire predictions of property falling massively, just short of a crash.
Ever since, the outlook for Real Estate market seems to be changing fast. The banks have already revised their property forecasts. It is being suggested that there could be very little further downside.
According to leading economists, Reserve Bank of Australia is hinting that it may cut rates again if the country’s recession deepens.
While the Real Estate market is already throwing signs of heating up, Australia’s home loan lending market is further fueling it up with a number of providers offering rates below 2 percent.
CBA has explained that new lending for housing rose again in August. A recovery in lending is one factor behind its view that dwelling prices will fall only modestly over the next 6 months. And it expects dwelling prices to rise solidly in H2 21.
Growth in first home buyer enquiry on real estate sites continues. With record low interests and many first home buyer incentives from the Federal Government the market seems to be balanced. Lack of investor activity is, though, preventing this market to rise sharply.
Prices have remained resilient during the pandemic. REA Insights Weekly Demand Index, which measures high-intent buyer activity on realestate.com.au, demand is now -13.4 per cent lower than its peak but still remains up year-on-year.
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