Housing market to stabilise?

By Ericka Pingol | 29 Aug 2019

The much-anticipated stabilisation of new homes in the market is on the horizon, according to the Housing Industry Association (HIA).

Evidence indicates that the market is heading towards the supply of new homes meeting—rather than exceeding—demographic growth requirements.

The easing of market conditions had given rise to a situation where monetary and fiscal stimulus is possible without fear of overheating house prices, according to the association’s chief economist, Tim Reardon.

“If economic activity improves, the credit squeeze dissipates, home prices stabilise, and the recent stimulus measures take hold, the supply of new work into the pipeline will soon reach its low point. All indications are that this stabilisation will occur and prevent a more significant downturn,” Reardon said.

The HIA sees demand for new detached homes holding up with only a 9% contraction in starts over the year.

The apparent resilience is due to the lag between the sale and commencement of housing constructions, giving the impression that contemporary market conditions are stronger than is the case.

Meanwhile, the unit market continues to contract rapidly, with starts now 41.8% lower than last year. A further 12% decline is predicted for 2019-2020, before a gradual improvement in 2021-2022.

Despite the continued decline of apartments under construction, there is a silver lining in the form of a “convergence of conditions” within the building industry, according to Reardon.

“We no longer have a boom in east-coast capital cities and stagnating markets elsewhere. Interest rates, income taxes and lending restrictions have all been eased in an effort to support activity and economic growth. State and Australian government investment(s) in infrastructure are also important to support labour market growth. These measures are now supporting activity in housing markets across the economy,” he said.

Top Suburbs : flemington , coolbellup , millner , torrensville , lockridge


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here