The existing affordability constraints diminished borrowing capacity, and the perceived value of units is expected to guide buyers towards more affordable housing options.
The Sydney housing market might be on the verge of a significant change. The recent announcement made by Prime Minister Anthony Albanese and Treasurer Jim Chalmers stated that Ms. Bullock would succeed RBA governor Philip Lowe after his term concludes in September. Now, the question arises: What implications could this have for the Sydney property market?
During the RBA meeting in July, the participants deliberated on the current economic uncertainties and the substantial rise in interest rates up to that point. As a result of their discussions, the members reached a consensus to keep the cash rate unchanged for the time being and reevaluate the situation later.
It is essential to bear in mind that the Reserve Bank of Australia (RBA) is not the sole determinant of home loan rates. Various other factors, including the risk of default, inter-bank competition, and government policies, can significantly influence the rates offered by financial institutions.
The existing affordability constraints diminished borrowing capacity, and the perceived value of units is expected to guide buyers towards more affordable housing options. According to certain sources, this trend is likely to favour apartments and townhouses as potential choices for prospective buyers.
As property prices begin to show signs of a decelerating pace of growth, there has been a noticeable surge in the number of properties being listed for sale. Additionally, it seems that property investors are exhibiting a slowdown and exiting the market, possibly influenced by financial pressures. This scenario may potentially result in increased pressure as economists and real estate agents analyze the steadfastness of house prices, highlighting the fundamental imbalance where demand consistently outperforms supply.
According to predictions from the big four banks, the average owner-occupier's variable home loan rate could potentially reach 7.36% in 2023 leading us to believe that in August we could be facing another hike further impacting housing activity if credit becomes less available. The media's coverage of interest rates is expected to keep influencing buyer behaviour and sentiment. However, we should also consider the impending factors of population growth and the projected rise in overseas students, as these elements could significantly shape and shift the property market dynamics.