Defying Expectations: The Resurgence of Australia’s Residential Real Estate Market
The residential real estate market is soaring high once again, defying earlier predictions of a significant downturn. With banks easing lending restrictions and China-based buyers coming back, property prices are on the rise.
In Sydney, residential prices have surged by 4.8% since February, and across all major cities, the momentum is building. Clearance rates are at a 15-month high of 75.3%, signalling strong demand. These unexpected increases significantly differ from the previous forecasts, which predicted a much larger market decline.
The return of China-based buyers is evident in the Foreign Investment Review Board data, showing China as the largest source of offshore buyers. Buyer inquiries from China for Australian properties rose by a staggering 127% in the first three months of the year, according to data from Juwai IQI.
Furthermore, the restriction on home loan borrowing may be easing as banks consider reducing their buffer to 2% from the current 3%. Westpac has already taken the lead in loosening lending rules for its home loans, allowing some customers lighter terms through a “modified serviceability assessment rate.”
These positive developments have also influenced consumer expectations, as reflected in the 10% surge in the “house prices expectation index” within the consumer confidence index. Despite expectations of further interest rate rises, consumers are increasingly optimistic about property prices.
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