Housing prices have surged again, hitting their highest point since the early 2000’s. This represents the quickest annual growth seen on the housing market in over a decade.
Unfortunately for first time owners, investment property buyers are buying properties in the countries’ two most populous cities, Sydney and Melbourne. This is due to the Reserve Bank cutting interest rates twice last year.
The latest data by CoreLogic, specialists in property data and statistics, have shown 2.6% growth last month in Sydney housing prices. Annual growth within the Sydney housing market has now ballooned to 18.4% per annum, which experts say is surprising.
The head of research for CoreLogic Australia, Cameron Kusher, said housing prices should be slowing down.
“This growth phase has been running for four-and-a-half years now, you would think that it should be starting to slow at this point but it’s actually re-inflating, if anything,” Mr Kusher said.
Kusher also suggested actions that the Reserve Bank and bank regulators such as the Australian Prudential Regulation Authority (APRA) could take to make housing more affordable for everyone, especially low income families and first time house buyers.
“APRA and the Reserve Bank have really no choice but to step in and look at tightening things even further for the investor market, probably for the foreign buyer market as well, to try and slow down the rate of growth in Sydney and Melbourne,” he said.
With such an uncertain start to the year, the response of government and non-government bodies to the housing affordability crisis remains to be seen.