News

Why young first-home buyers are set to miss out on an affordable house in 2021 as investors return

How young people will miss out on snapping up a bargain-priced property as investors return to the property market

  • Investor numbers have posted biggest monthly increase since September 2016
  • Australian home lending in January surged by 10.5 per cent in just one month 
  • Home lending at start of this year has surged to a record high of $28.8billion 

Young first-home buyers are missing out on a bargain home as investors return in force to the property market.

Cashed-up investors were last year largely absent from the housing market as Covid lockdowns saw crowds banned at auctions and Australia sunk into recession.

The Sydney and Melbourne housing markets went backwards for almost half of 2020.

That has changed in 2021 with investor activity now at the highest level since September 2016, with many of them now outbidding younger hopefuls at auctions.

Young first-home buyers are missing out on a bargain home as investors return in force to the property market. Pictured is a stock image

Young first-home buyers are missing out on a bargain home as investors return in force to the property market. Pictured is a stock image

House prices in both capital cities and regional areas are also surging to record highs as interest rates remain at record lows. 

In January, home lending surged by 10.5 per cent in just one month to a record $28.8billion, the Australian Bureau of Statistics revealed on Monday.

In just one year, the value of new home mortgages has surged by 44.3 per cent.

Making matters harder for young Australians, new lending to investors surged by 9.4 per cent in January, the biggest monthly increase by value since September 2016, and by 22.7 per cent over the year – with most of that increase occurring during the past three months.

Owner-occupier loans climbed by 10.9 per cent to be up by a massive 52.3 per cent over the year. 

Canstar’s group executive of financial services Steve Mickenbecker said lockdowns last year had barely damaged property prices, with the value of lending climbing for the eighth straight month.

Making matters harder for young Australians, new lending to investors surged by 9.4 per cent in January, the biggest monthly increase by value since September 2016, and by 22.7 per cent over the year - with most of that increase occurring during the past three months. Pictured is a Brisbane auction in 2020

Making matters harder for young Australians, new lending to investors surged by 9.4 per cent in January, the biggest monthly increase by value since September 2016, and by 22.7 per cent over the year - with most of that increase occurring during the past three months. Pictured is a Brisbane auction in 2020

Making matters harder for young Australians, new lending to investors surged by 9.4 per cent in January, the biggest monthly increase by value since September 2016, and by 22.7 per cent over the year – with most of that increase occurring during the past three months. Pictured is a Brisbane auction in 2020

House prices surge

Sydney: up 3 per cent to $1.061million

Melbourne: up 2.4 per cent to $829,509

Canberra: up 2.2 per cent to $797,421

Brisbane: up 1.6 per cent to $593,232 

Hobart: up 2.5 per cent to $572,188

Perth: up 1.6 per cent to $513,566

Adelaide: up 0.8 per cent to $509,148

Darwin: up 1.3 per cent $508,410 

Source: CoreLogic Hedonic Home Value Index for February 2021 

‘The second round of lockdowns in Sydney, Melbourne and Brisbane seem to have put little more than a dent in the property market and financing activity,’ he said.

‘Home lending continues to bounce back from the earlier impacts of the pandemic.’

Hours before the official data was released, CoreLogic revealed Australian property prices had surged by 2.1 per cent in February, the fastest monthly increase since August 2003.

Sydney’s median house price surged by an even steeper 3 per cent to $1.061million as Melbourne’s equivalent value rose by 2.4 per cent to $829,509.

Property price records were set in 53 of Australia’s 88 statistical regions, with combined capital city values rising by 2 per cent to $675,014 as regional prices increased by 2.1 per cent to $438,185. 

That meant all-time highs were reached in 60 per cent of the nation’s housing sub-markets. 

With interest rates at a record low of 0.1 per cent, first-home buyers are still keen to buy a house or unit.

Within the owner-occupier category, these property newcomers are still active, with the value of new loans to buyers in this group rising by 10.1 per cent in January and a whopping 73 per cent over the year.

The federal government’s HomeBuilder subsidies are at least keeping the dream alive for one segment of the housing market. 

Last week’s national auction clearance rate stood at 81.9 per cent while Sydney’s level was an even higher 88.9 per cent, a clear sign of hot competition in the housing market.  


Source link

bourbiza

Bourbiza Mohamed. Writer and Political Discourse Analysis.

Related Articles

Leave a Reply

Back to top button