Has The Mortgage Bubble Burst? A Snapshot Of House Prices In Australia
Steady increase has been the hallmark of the property market in Australia for the last 13 quarters. That record has recently been broken by a slight slump in the bullish market. Down turn was driven by the Sydney and Melbourne markets showing a clear decrease in median house pricing in the last quarter. Other capital cities such as Brisbane, Hobart and Canberra showed significant increase in median house prices, with Perth and Darwin show slight growth, with Adelaide remaining steady.
The median house price in Sydney has dropped 2.5%
The median house price in Sydney has dropped 2.5% down to $1,025,478. Melbourne fared slightly better with a 0.1% drop to a median house price of $718,000. Despite strong gains in Brisbane and other major capitals with gains of up to 9.8% in Hobart, the market still dipped 0.4% down to a median house price in an Australian capital city of $695,788.
Here is why current Australian property slump will get much worse!
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When we look at house price growth just one year prior during the December quarter of 2014 we can see that there is marked decrease. Median House price increased in that quarter by 7.4%. That strong growth gradually decreased over the year slowing down to a loss in the last quarter.
Lending institutions are being required to scrutinise debt serviceability much more closely to ensure that default rates reverse the current trend. Despite record low interest rates the default rate in Australia has slightly increased from 1.15% to 1.2% according to data from Moody’s Investment Services.
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Sydney housing prices have risen
When we consider that Sydney housing prices have risen 52.5% over the last three years is it any wonder that a drop of housing price has occurred. If this continues to fall we may see a little relief for new home-buyers and a new sense of nervousness for investors.
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