Australian housing market records further weakening


Did this headline grab your attention? Good, because we have indicated more than once that there is no such thing as Australian property market. Just like there is no such thing as human being. Markets are different because they are driven by human feelings.

While the property market in Sydney and Melbourne has weekend further in February 2019. We are not concerned. Why?

Property market correction is a natural beast.

We are seeing that majority of correction is confined to property markets in Sydney and Melbourne. Both of the housing markets experienced a significant growth over the last few years and it is only natural that they are correcting. While this correction seems to be slightly larger than previous record (so far), we would like to remind people that the run up in prices was phenomenal as well.

There are other property markets in Australia

While we are seeing the weakness in property markets in Sydney and Melbourne we would like to remind people that there are other housing markets in Australia. Hobart has registered a good growth, Adelaide is going nicely and Brisbane doesn’t seem to be affected by declines in Sydney and Melbourne.

A big player in this hosing correction is the lending restriction

We think a lot of the current correction is related to manufactured tightening in lending condition. Particularly property investor group have been impacted by a raft of measures to curb speculation, from higher interest rates to assessment rates. Stretched affordability in two largest markets, Sydney and Melbourne, is not helping to support prices either. With the demand starting to ease we don’t expect tremendous recovery in the area. However we do believe that other markets should sail through fairly well, especially markets that don’t experience the affordability issues Sydney and Melbourne have.

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