The spring selling season this year is set to be the best for first-home buyers for some time as investors leave the market and prices stabilise.
Investor loans have been hit hard by regulator crackdowns and tougher lending rules and it has opened the door this year for first-home buyers to approach property sales with more confidence having less investors to compete with.
The tougher lending rules look set to stay even though they have already had noticeable effects, with APRA chairman Wayne Byres saying they would be implementing more macroprudential measures next year.
“Given the environment we are in – high house prices, high household debt, low interest rates and subdued income growth – that scrutiny won’t lessen any time soon,” he said in a speech last week.
Louis Christopher from SQM Research said this year the spring property selling season looks very different.
“It’s an entirely different spring market,” he told Australian Financial Review.
“This time last year, listings were abnormally low and demand was abnormally strong.”
“As the season moved on, you have the situation where listings were even less because vendors were so fearful of not being able to buy back into the market.”
“This time round we’re not having that. We’re having more listings, a lot less buyers in the market.”
“Days on market are increasing, particularly in Sydney. Listings have picked up – not at the oversupply levels – but they’ve picked up.”
As a result of the slowdown in investment lending first-home buyers are gathering momentum. In July, lending to first-home buyers jumped by 6.5 per cent in the country, helped along by stamp duty exemptions in Melbourne and Sydney.
In another boost for first-home buyers this spring, the Australian dollar has again surged past the US80c mark, making Australian property less attractive from overseas investors, giving first-home buyers even less people to contend with on auction day.