Housing Prices Fall in March Quarter

Recent figures from RP Data show a 1.1% fall in Sydney’s median dwelling prices, while housing credit growth has slowed to just 0.4%. This suggests banks are holding back on lending for residential property, likely due to tighter post-GFC lending criteria. But there’s also a growing sentiment of caution among buyers themselves, many of whom are hesitant to invest in property while prices are stagnating or falling.

Global Uncertainty Weighs on Local Confidence

Although the Australian economy remains resilient, with near-full employment, solid GDP growth, controlled inflation and stable interest rates, the international outlook is far more volatile.

In the United States, efforts to stimulate the economy through zero interest rates and aggressive monetary policy are yet to show stable results. There’s concern that banks may be using these funds to chase returns in financial markets rather than supporting business lending, the very issue that exacerbated the last crisis.

Meanwhile, Europe faces ongoing challenges with public debt, sluggish growth and high unemployment. Populations across the Eurozone have been resistant to the structural reforms needed for long-term economic recovery.

Has the Property Myth Finally Cracked?

For decades, Australians believed that “property always goes up.” But the current market shift is forcing both homeowners and investors to re-evaluate that assumption. With prices softening, developers and investors are questioning whether now is the right time to buy.

However, one bright spot is emerging: the rental market.

Rising Rents Signal Opportunity for Investors

Economists are beginning to suggest that property investors may soon return to the market, lured by rising rental yields and a growing demand for rental accommodation amid supply shortages. For long-term investors, the combination of lower purchase prices and increasing rents could signal favourable conditions.

If you’re considering buying an investment property, it’s essential to assess the real weekly cost of ownership. That’s where our Negative Gearing Calculator can help. Use it to understand how depreciation, rental income, and tax deductions will affect your cashflow, and your long-term financial goals.

Our Negative Gearing Calculator can help you calculate the weekly cost of your property investment.

Meeting with Gavin Bateman

30

Book Now

Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.