Latest news with #propertyprices
Daily Mail
11 hours ago
- Business
- Daily Mail
Why that home you could afford in 2018 is now a fantasy - with Aussies urged to buy now before it's too late
The average Aussie can no longer afford the typical big city house they could seven years ago after property price rises soared at triple the pace of wages. Record-low interest rates during Covid followed by record-high immigration levels have caused house prices to climb by double-digit figures in some years. Across Australia, prices have surged by 56 per cent since 2018 but in Brisbane, house values have soared by 86 per cent and almost doubled in Adelaide. By comparison, overall wages have increased by just 18.6 per cent - or a third the level of property price increases. Finder personal finance expert Sarah Megginson said entry level prices were only likely to keep soaring, despite the high levels of mortgage stress. 'Demand – especially in affordable markets – is expected to surge, which could potentially push entry-level prices even higher and squeeze first home buyers further,' she said. Back in 2018, Australia's middle home price covering houses and units stood at $532,327, CoreLogic data showed. With a 20 per cent deposit, the average, full-time worker earning $83,486 was at a pinch able to get a loan and borrow five times their salary before tax. Seven years later, Australia's median home price now stands at $831,288. Someone earning the new average, full-time salary of $102,742 with the equivalent deposit would now have to borrow 6.5 times their income - putting them in the severe mortgage stress territory. The banks are reluctant to lend a prospective borrower more than five times their pay, with the Reserve Bank's two rate cuts in 2025, so far, hardly undoing the 13 increases in 2022 and 2023. The 3.85 per cent cash rate is the lowest since June 2023 but is still a far cry from the Covid record low of 0.1 per cent. Lower interest rates increase borrowing capacity, but they also put up house prices. Sydney, Australia's most expensive property market with the biggest inflow of overseas migration, has seen its mid-point house price climb by 49 per cent since mid-2018, with prices rising from $998,270 to $1.486million. But in Brisbane, house prices have soared by a whopping 85.7 per cent from $538,693 to just over $1million in a city with a large influx of interstate migration. Record-low interest rates during Covid followed by record-high immigration levels caused house prices to climb by double-digit figures during some years (pictured is a Sydney auction) Perth prices have soared by 69 per cent from $481,612 to $813,810, in another city with strong population growth from other parts of Australia. Adelaide house prices have almost doubled, surging by 89.3 per cent from $465,992 to $882,157. Melbourne, however, is the exception to other major capital city markets with its mid-point house price climbing by just 15.6 per cent from $813,064 to $939,965. This was the only big capital city where house prices increased at a pace slower than wages growth. What if I'm single? Single Australians earning the average wage were able to buy the median-priced house in most capital cities, except Sydney and Melbourne, less than a decade ago. But that's dramatically changed with only working couples now having a chance in most capital city markets. A Finder analysis revealed South Australia has seen the biggest decline since 2017, going from having 85 per cent of suburbs being affordable for singles to 19 per cent. The ratio in Western Australia has fallen from 67 per cent to just 17 per cent. In Queensland, it's plunged from 66 per cent to 19 per cent. New South Wales, which was an overpriced market eight years ago, saw the proportion of affordable suburbs fall from 40 per cent to 11 per cent. Despite weak price growth in Melbourne, the proportion of affordable suburbs in Victoria had declined from 50 per cent to just 16 per cent. 'Buying a home is harder than ever, especially if you're trying to do it on your own without a partner or family member,' Ms Megginson said. 'First home buyers are not expecting to step into a mansion for their first property, but even those with realistic expectations are shocked that even entry-level homes carry eye-watering price tags.'
News.com.au
13 hours ago
- Business
- News.com.au
‘Crocodile tears': Home loan change could add to worsening housing crisis
It's now easier for Australians to buy a home, but a key change to credit limits could push up the price of housing, a leading economist warns. The Australian Prudential Regulation Authority (APRA) announced on Thursday that Higher Education Loan Program (HELP) debts would be excluded from the credit limit for prospective homebuyers from September 30. Independent economist Saul Eslake told NewsWire that the change's two most obvious effects would be to 'allow some people who'd buy a home anyway to buy a more expensive one and (to) allow some people who wouldn't have been able to buy a home because of their student debt' to do so'. 'The net effect of those two factors will be to increase the demand for housing,' he said.
 'The likely result is that it will, along with other things that governments are doing, put further upward pressure on the prices of property.' Mr Eslake said the change meant some people would be able to enter the housing market more quickly than otherwise but 'it would come at the expense of others'. 'The primary beneficiaries of this change will be those who will already own property will be able to sell it to people at higher prices than otherwise,' he said. 'That's consistent with the 60 years of evidence that we have, going back to the first homeowners grant scheme introduced by the Menzies government in 1964 that tells us that anything that allows Australians to pay more for housing than they'd be able to otherwise results in more expensive housing and a smaller proportion of the population owning it.' Mr Eslake added it was 'obvious' the money saved on HELP debt cuts would now be going towards a more expensive house. 'The reason that governments keep doing these things despite the evidence and despite all of the crocodile tears they routinely share about the difficulties faced by would-be first-home buyers is because they know that there actually aren't very many of them,' Mr Eslake said. 
 'On average, 110,000 a year, whereas there are 11 million people who own their own home. There are 2¼ million who own at least one investment property. That's an awfully much bigger number of votes for policies that keep house prices going up than there are for policies that might restrain the rate at which house prices keep going up.' Mr Eslake said the reason the housing crisis continued to worsen was 'because a majority of the population do not want it to be solved and politicians know that'. 
 'Until enough people my age, either out of an altruistic concern for the ability of their children and grandchildren to be able to do what they did, or perhaps more likely out of being pissed off at having to be the bank of mum and dad, until enough of them really want that to change, it isn't going to change.'
Yahoo
15 hours ago
- Business
- Yahoo
‘Crocodile tears': Warning over key change
It's now easier for Australians to buy a home, but a key change to credit limits could push up the price of housing, a leading economist warns. The Australian Prudential Regulation Authority (APRA) announced on Thursday that Higher Education Loan Program (HELP) debts would be excluded from the credit limit for prospective homebuyers from September 30. Independent economist Saul Eslake told NewsWire that the change's two most obvious effects would be to 'allow some people who'd buy a home anyway to buy a more expensive one and (to) allow some people who wouldn't have been able to buy a home because of their student debt' to do so'. 'The net effect of those two factors will be to increase the demand for housing,' he said. 'The likely result is that it will, along with other things that governments are doing, put further upward pressure on the prices of property.' Mr Eslake said the change meant some people would be able to enter the housing market more quickly than otherwise but 'it would come at the expense of others'. 'The primary beneficiaries of this change will be those who will already own property will be able to sell it to people at higher prices than otherwise,' he said. 'That's consistent with the 60 years of evidence that we have, going back to the first homeowners grant scheme introduced by the Menzies government in 1964 that tells us that anything that allows Australians to pay more for housing than they'd be able to otherwise results in more expensive housing and a smaller proportion of the population owning it.' Mr Eslake added it was 'obvious' the money saved on HELP debt cuts would now be going towards a more expensive house. 'The reason that governments keep doing these things despite the evidence and despite all of the crocodile tears they routinely share about the difficulties faced by would-be first-home buyers is because they know that there actually aren't very many of them,' Mr Eslake said. 'On average, 110,000 a year, whereas there are 11 million people who own their own home. There are 2¼ million who own at least one investment property. That's an awfully much bigger number of votes for policies that keep house prices going up than there are for policies that might restrain the rate at which house prices keep going up.' Mr Eslake said the reason the housing crisis continued to worsen was 'because a majority of the population do not want it to be solved and politicians know that'. 'Until enough people my age, either out of an altruistic concern for the ability of their children and grandchildren to be able to do what they did, or perhaps more likely out of being pissed off at having to be the bank of mum and dad, until enough of them really want that to change, it isn't going to change.' Error in retrieving data Sign in to access your portfolio Error in retrieving data
Globe and Mail
a day ago
- Business
- Globe and Mail
Growing number of renters are waiting for home prices to decline further before buying, report says
Canadian renters are waiting for housing prices to drop before jumping into the market, according to a new report, reflecting optimism over a trend of falling prices. As renters inked new leases this year, 28 per cent said they considered buying property rather than renting, the 2025 Canadian Renters Report says. This is nearly the same as last year, when 29 per cent of respondents said they considered buying a home. The major difference, according to the report, released by Royal LePage on Thursday, is that about 40 per cent of renters across Canada reported they are choosing to wait for property prices to fall further, compared with 30 per cent in 2024. New builds drive rent decreases, but also leave tenants vulnerable to steep hikes, experts say The survey, conducted by Burson on Royal LePage's behalf, heard from 1,854 adult Canadian renters between June 2 and 9 using the Leger Opinion online panel survey. Phil Soper, president and chief executive of Royal LePage, believes that trend is being driven by optimism over house prices, which have dropped since peaking in 2022. 'It's really rare to see home prices in our biggest cities stay as flat as they have, or even give up some value for as long as they have,' Mr. Soper said. For those looking to buy, Mr. Soper said he would not bet on prices improving further. The Canadian Real Estate Association Housing Price Index showed national housing prices had dropped by 3.5 per cent in May compared with the year prior. Renters in Saskatchewan and Manitoba are the most hesitant to shift from the rental market to home ownership, with 48 per cent reporting they are choosing to wait for market prices to drop. While 44 per cent of renters from the two provinces said they were considering buying property in 2024, that ratio has since dropped to 28 per cent. 'There's definitely uncertainty, I think in the economy, tariff implications,' said Anthony Bertrand, a realtor in Winnipeg with Royal LePage. Free month's rent, parking spaces and utilities: Landlords are clamouring to attract tenants Mr. Bertrand and Mr. Soper said that national concern about housing costs can also lead potential buyers to put away their pocketbooks, regardless of region. And while the cost of living is generally lower in the Prairies, the region's major markets have seen an increase in home prices year-over-year. Saskatchewan home prices were up 8.6 per cent in May from the previous year, according to the CREA's Home-Price Index, tied for second with Newfoundland and Labrador. Quebec topped the list at 9.8 per cent. The real estate association did not have publicly available Home-Price Index data for Manitoba as a whole, but it reports that Winnipeg housing prices have risen 8.2 per cent over the same time period. Home sales rose in May for the first time since November The survey also asked renters to consider whether they could afford to own a home. In last year's Canadian Renters Report, 41 per cent of Canadian renters who responded to the survey said they did not have a sufficient down payment for a home, and 20 per cent said they could not qualify for a mortgage or financing. Those questions were combined in this year's survey, with 26 per cent of renters saying they could not afford a down payment or financing. People in the rental market are, for the most part, looking to buy property in the future, typically in the next two to five years. For those who are not, the main reason is affordability. More than half of renters who said they were not buying homes stated that their desired neighbourhood was unaffordable. About 40 per cent of respondents said renting is more affordable, while the same percentage said they don't want the responsibilities of maintaining a property.
ABC News
2 days ago
- Business
- ABC News
Property prices tipped to hit record highs in 2025-26, bringing pain for buyers and a boom for sellers
Australian property prices are set to jump even higher in the coming year, which is more bad news for first-home hopefuls. But higher prices will help sellers boost profits from the sale of properties, as they capitalise on the current interest rate-cutting cycle. Two new reports released today reflect the interests of two very different groups of people in Australia. According to Domain's latest Price Forecast Report, Sydney and Melbourne prices will lead the charge in the next 12 months. The median house price in Sydney is forecast to jump by another 7 per cent in 2025-26, to a staggering $1.83 million by June 2026. It means the typical house price in Sydney will rise by $112,000, which is more than the average full-time worker earns before tax ($103,000). The median house price in Melbourne is tipped to rise by 6 per cent, after two years of downturns, to $1.1 million. Property prices in Brisbane, Adelaide and Perth, once hotspots for affordability, are showing signs of cooling, but not nearly enough to ease the pressure on first home buyers. Nicola Powell, Domain's chief of research and economics, says the forecast price rises will be a "reality check for many people." "If you're trying to break into the property market, the next year could be your toughest challenge yet," she warned. "While interest rate cuts and government support may offer some help, they're also likely to keep prices rising, especially in Sydney and Melbourne, where the market is more sensitive to rate changes. "Growth will slow compared to past cycles, but affordability is still a major barrier, with housing costs consuming a large portion of household income," she said. It will be a similar story for unit price growth. Domain said affordability constraints and first-home buyer incentives will likely push more buyers toward units, where prices are cheaper than the detached housing market, and unit prices will hit record highs in most capital cities. It says lower interest rates help to boost property prices because they improve the borrowing power of Australians. It says the Reserve Bank has already cut the cash rate by 50 basis points this year, and the market is pricing in an additional 80 basis points of cuts by mid-2026. However, it says strong housing demand could also ease a little over the next 12 months, because population growth is expected to slow down. The median unit price in Sydney is forecast to jump by 6 per cent in 2025-26 (up $53,000 in 12 months) to $889,000, which will be a record high. In Brisbane, the median unit price is tipped to jump by 5 per cent (up $31,000) to $701,000, also a record high. Similarly, Perth will see the median unit price jump 6 per cent (up $33,000) to $552,000, and Adelaide will see the median unit price rise by 3 per cent (up $18,000) to $586,000. Domain's report does not include property prices in Hobart. Meanwhile, Cotality (formerly CoreLogic) has released its latest Pain & Gain report, which views properties from the perspective of people who are interested in making a "profit." It analysed 86,000 resales in the March quarter and found 94.9 per cent of property resales "delivered a profit" for the sellers, with a median nominal gain of $305,000. That was down slightly from $310,000 in the previous quarter, marking the first financial quarter since March 2023 that median nominal gains have fallen. But Eliza Owen, Cotality's head of research, said the results reflected a housing market in transition, with profitability set to rise further after the RBA's February and May rate cuts, which have reignited demand and lifted values 1.3 per cent in the three months to May. "Although profitability held steady in early 2025, we're seeing clear signs of renewed momentum," Ms Owen said. "With rate reductions now flowing through to buyer demand and value growth, we expect stronger resale returns in the months ahead." Cotality's report says regional hotspots such as Noosa, Busselton, Grant, and the Sunshine Coast delivered some of the biggest profit uplifts in Australia in the March quarter. In those markets, median resale profits surpassed $400,000 in the quarter, "a staggering increase compared to five years ago." It says houses also continued to outperform units nationally in the March quarter, with 97.2 per cent of house resales delivering a profit, compared to 90.1 per cent of unit sales. "The difference in returns was striking over the March quarter, with the median gain on houses at $355,000, around 73 per cent higher than the $205,000 median gain for units," the report says. "Interestingly, despite the wide gap in gains, the median loss was nearly identical. The median loss was $45,000 for houses and $44,000 for units."
