This Month in Review
The media continues to hold its focus on the market downturn, but CoreLogic’s Tim Lawless reminds us that the downtown is relatively mild, with a cumulative 1.9% fall in value since the September 2017 peak.
Indeed, things going right deserve a mention in the media too. Despite the market cooling, first-home buyers have been playing an important role in sustaining Sydney and Melbourne markets. And Adelaide is proving to be a standout, remaining buoyant and capturing the attention of buyers from eastern states.
Despite some urging the RBA board to issue a change to Australia’s official cash rate, it has been left on hold at just 1.5%. CoreLogic’s Tim Lawless indicates the slack labour market played a role in this decision, with the national unemployment rate now at 5.4%.
Moody’s Investors Service predicts mortgage delinquencies to increase within two years. The number of interest-only loans converting to principal and interest mortgages continues to rise, bringing about “payment shock” from higher monthly repayments.
Also, an analysis by Endeavour Equity Strategy determined more than 40% of mortgage debt in their sample was “non-prime” due to banks basing their lending decisions on the Household Expenditure Measure, which boosts serviceability by up to 20%.
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The Market Essentials Report is compiled by Buyside on behalf of Loanscape. Founded by Josh Masters, Buyside are registered buyer's agents with on the ground expertise in the Sydney and Brisbane property markets.