Australia’s sliding property market may have been watched with horror by home owners, but for those aching to enter the market, it offered a sliver of hope.
However, new research released by property analytics firm CoreLogic reveals that hope may have been misplaced.
Throughout the 2018-19 financial year, the share of home sales transacting for less than $400,000 across capital cities remained largely unchanged from the year before, despite the property market as a whole sliding 8.7 per cent for houses and 5.9 per cent for units.
“Throughout the 2018-19 financial year, 26.0 per cent of all houses sold nationally were under $400,000 and 32.5 per cent of all unit sales were under $400,000,” research analyst Cameron Kusher said.
To put that into perspective, the year before, the share of units selling for less than $400,000 was slightly higher at 26.3 per cent, and the share of houses selling for less than $400,000 was only 31 per cent.
“It is interesting to note that the share of unit sales under $400,000 has increased much more for units than houses,” Kusher said.
Across regional Australia, the share of houses selling for less than $400,000 is much higher – 42.8 per cent. It’s the same case for unit sales, with 54.3 per cent of sales being for properties less than $400,000.
And where the share has remained largely unchanged in capital cities, for home buyers in regional areas, the share of properties selling for less than $400,000 has “seen a sizeable decline”.
In the 2017-18 financial year, 44.1 per cent of house sales and 55.6 per cent of unit sales were below $400,000.
“The next financial year could look very different to what we have seen over the 2018-19 financial year,” Kusher added.
“We’re only in mid-August and we’ve already seen interest rates reduced twice, serviceability floors on mortgages reduced and some recent rises in dwelling values in the largest capital cities.
“While a significant rise in dwelling values isn’t expected, there is an expectation of a moderate increase in dwelling values, as a result the 2019-20 financial year is expected to see fewer sales under $400,000 than those recorded in 2018-19.”
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