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Respite for first home buyers as Sydney and Melbourne markets cool
By John Collett
Those looking to get onto the property market in Sydney and particularly Melbourne can likely take their time and accumulate a larger deposit, with analysts forecasting house prices are unlikely to rise significantly, at least for the remainder of this calendar year.
SQM Research figures show asking rents falling slightly in both cities during the 30 days to August 12. That makes it a bit easier for those saving a deposit for their first home.
“We believe that we are going to see softer property prices for the remainder of 2024,” says Louis Christopher, the founder of SQM Research.
Figures from CoreLogic show Sydney prices were up by 0.3 per cent in July and were 1.1 per cent higher over the three months to the end of July. Prices were 5.6 per cent higher over the 12 months to the end of July.
Melbourne’s prices fell by 0.4 per cent in July and fell by 0.9 per cent over the quarter, to post growth of only 0.2 per cent over the 12 months.
Angie Zigomanis, head of data and insights at Quantify Strategic Insights, says there is likely no need to rush. “There is less risk of prices running away from you in Sydney and Melbourne; providing an opportunity to take longer to save a deposit,” he says.
Christopher expects only modest falls in prices in Sydney from now until at least the end of this year, and further modest falls in Melbourne over the remainder of this year. However, the easing of prices could be reversed if the Reserve Bank of Australia starts cutting interest rates next year.
Eliza Owen, CoreLogic’s head of research Australia, says Melbourne is “definitely a buyer’s market right now.” Prospective homeowners in the southern capital have more time to inspect properties and to get their finance together, she says.
Individual circumstances of those looking to get into the property market vary, Owen says. Some may be well served by taking the time to accumulate a larger deposit – given the size of the deposits needed to buy in Sydney and Melbourne, she says.
Andrew Wilson, chief economist at My Housing Market, takes the view there is likely no real benefit of waiting on the sidelines if you are in a position to buy.
First home buyers in Sydney are still likely to want to get into the market as soon as possible, given it is always a “big ask” to get into the market there and first home buyers in Melbourne probably should not wait too long, he says.
Wilson says the low point of prices for “entry-level” property in Melbourne suburbs such as Hawthorn and Richmond is likely past, with prices starting to rise.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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