The worse things get globally, the better for housing
If the financial markets and the more bearish economists are right, and the RBA has come to the end of a cycle of tightening, Australian housing is likely to be one of the safer places to invest. While there has effectively been no house price growth for 19 months, household disposable incomes have grown rapidly at 7% to 8% per annum.
With the possibility of mortgage rates coming down to around 5.6%, the possibility of a return to healthy house price growth re-emerges as savers are punished via lower cash returns and geared investors run for the perceived security of bricks and mortar.
FHBs are expected to re-appear towards the end of this year, led by buyers in NSW trying to beat the December 31 deadline for the end of Stamp Duty concessions. One mortgage originator says loan enquiries from FHBs are up 15% nationwide and 30% in NSW last month, on the back of interest rate stability for the past 10 months.
Amid gloomy economic conditions globally and a generally subdued housing market, some encouraging signs have emerged in the Australian housing market.