With a booming property market, people who had decided not to sell last year are confident to sell their properties this year.
As demand is currently outpacing supply, homes are selling faster.
With predictions that prices could rise as much as 20% over 2021-22; vendors expect to sell their properties at a higher price.
Due to the ease of restrictions, the improved market condition and low interest rates, rising property prices influence sellers and buyers to take action.
In the coming months, we could see more stock hit the market, which might help some buyers who have been struggling recently to get on the board.
Sydney still a hot market
There were about 680 auctions in Sydney alone over the weekend, with a majority sold under the hammer.
House hunters have been winning bids by going above reserve prices. A property in Doncaster Ave sold at $2.9 million above the reserve.
Even properties in Perth are selling at their fastest rate in 15 years.
According to data from the Real Estate Institute of Western Australia:
- The median selling time dropped from 43 days in March 2020 to 17 days in March 2021.
- The Perth home value index rose 1.8% in March, according to CoreLogic data.
- There were 8,247 properties listed for sale at the end of March 2021, a 5.1% increase compared to February 2021.
If investors are starting to show more interest in properties, then prices will continue to rise. So if you’re thinking of buying property in the next 12 months, start getting your finances in order now.
Will lending restrictions change?
In its April 2021 publication of the Financial Stability Review, the Reserve Bank of Australia (RBA) noted that the low interest rates and increasing house prices could create a risk of excessive borrowing.
The RBA warned that if banks and lenders are too accommodating, they could engage in excessive risk-taking.
What does this mean for you?
The RBA is worried that the current outlook may lead to lenders dropping some of their strict policies to make borrowing easier for consumers. This could trigger a drop in property prices – if too many people can buy property at once, it’s likely to cool the market down quickly.
However, lenders seem to be sticking to measures that will keep borrowing in a responsible zone – including interest rates rising and rolling back some of the policies they introduced to help borrowing during COVID-19, which means the RBA has nothing to worry about at this time.
Interest rates are low right now, and lenders have eased their COVID-19 lending restrictions. If you’re thinking of buying a home, our mortgage brokers are here to help. Call us on 1300 889 743 or enquire online.