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Housing market: Cooling or crashing

Everyone has an opinion on the property market. We help you sort fact from fiction to stay ahead of the game.


Raise the topic of property next time you have a few friends around for a barbecue and you’ll get a range of reactions. Some will say the market’s too hot. Others will say it’s cooling. And a few will say “I think the market’s okay because people keep telling me it is, but I’m not really sure why”.

Bottom line is, everyone has a view on home values and where we are in terms of the property cycle.

The thing is, it’s possible to take the guesswork out of the state of the market and stay informed.

While no one knows exactly when the market has reached its peak, or if it is about to hit an upswing, some key figures can help you determine where the market is heading.

If you’re planning to buy a home or investment property, that’s a critical starting point to know if you’re in a good position to negotiate a better deal.

Markets within markets

Researching the area you plan to buy in is a no-brainer. But what many people don’t realise is that across Australia, there are markets within markets.

The buoyancy of the market, as well as buyer demand and property price growth, can vary from suburb to suburb – and even within the same neighbourhood.

That’s because the location is a key decider of value growth and buyer demand.

As a guide, figures from CoreLogic show Melbourne’s median home value has dipped 4.7% over the last year. But that doesn’t mean all of the city’s suburbs have dropped in value by 4.7%.

According to CoreLogic, values at the most expensive end of Melbourne’s market have fallen by almost 9% over the past 12 months. The more affordable end of the market has seen a 2.9% rise in values.

Navigating mixed messages

The impact of varying market conditions from postcode to postcode highlights the importance of researching the market you plan to buy in. And sometimes that means checking out homes listed for sale, keeping track of which properties are actually selling, and what sort of price they are commanding.

But there are other figures worth looking at, too.

Auction clearance rates

Auction clearance rates can be a handy barometer of market health.

According to CoreLogic, only around 43% of homes being put up for auction actually sell on auction day. That sort of low clearance rate can be a sign of a buyer’s market.

But again it comes back to local knowledge.

In Sydney for example, over 64% of homes in the western Sydney suburb of Blacktown are selling at auction. That’s far higher than the average Sydney clearance rate of 42.7%.

Similarly, in Melbourne’s inner suburbs, around 60% of homes are selling under the hammer compared to one in three in the north-western suburbs.

Information is power

This sort of information is extremely useful to home buyers and investors though it’s not always easily accessed by individual buyers.

Your Mortgage Choice broker has access to a range of industry information to help you gauge the health of the market you plan to buy in.

Staying ahead of the property game means pulling together as many insights as possible about things like market health, home loan rates, how much you can borrow, and how much room you have to negotiate on a property’s price.

As a home loan expert, your Mortgage Choice broker can provide key industry statistics and identify which loan from our wide panel of lenders is best suited to your needs – as well as advise on how you can improve your chances of securing home loan approval in today’s market.

Contact your local Mortgage Choice broker today to gain a deeper understanding of the state of the property market in your patch, and have your finances sorted when you’re ready to buy.

Posted in: Home loans

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