The first half of 2019, prior to the federal election, would be the best time for first home buyers to enter the property market, according to a real estate agency.
Belle Property expects median house values in Sydney to continue on it downward slide in 2019, opening up opportunities for aspiring home buyers to get their foot into the property market.
Mark Foy, principal at Belle Property Surry Hills, said: “There’s exciting times ahead for those wishing to buy as they’ll be able to take advantage of the drop in the market – especially for first home buyers. But be warned, it won’t last forever.
“The first half of 2019 is your best bet for buying, before the federal election.”
The real estate agency noted, however, that it is unclear how far house prices will fall in the face of potential limits on negative gearing to new housing and the halving of the capital gains tax concession, as proposed by the Labor Party should they win the next federal election.
As such, according to Mr Foy, investors will likely purchase property prior to the federal election in case Labour is elected.
He also predicts that 2019 will see increased demand from first home buyers looking to take advantage of the housing slump, with prices expected to fall an additional 10 per cent next year.
Further, the principal predicts borrowers with the capacity to move up to a higher price range will be “rewarded” by the value that the top end of the market offers.
Short-term rental accommodation will continue to be a popular choice among property investors and rents are likely to “stabilise”, Mr Foy said.
The Australian Prudential Regulation Authority this month announced it would be scrapping its 30 per cent speed limit on interest-only loans from 1 January 2019 and, earlier this year, removed the 10 per cent benchmark on investor loan growth, which could improve demand and access to loans.
The restrictions saw investor home loan approvals drop by 12.4 per cent ($16.6 billion) in the year to 30 June 2018, representing 31.1 per cent ($117.5 billion) of new home loan approvals.
It also led to a sharp decline in interest-only loan approvals, which fell by 54.9 per cent ($74.4 billion) over the same period, representing 16.2 per cent ($61.2 billion) of new home loan approvals.
However, economists have also suggested that the scrutiny of the financial services industry, including through the Hayne royal commission, could increase the risk-aversiveness of lenders.
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