Melbourne and Sydney are both beginning to feel the effects of the downturn in the housing market, we have now passed the peak and houses have begun to drop in value. December started with a decline in both Melbourne and Sydney. The drop in the countries two biggest cities does not come as a shock though, Sydney has had an average of 0.7% decrease over the course of a month and Melbourne’s growth has slowly been staggering.
According to David Scutt a writer for Business Insider. Melbourne is managing to remain strong in today’s tough housing market despite tighter restrictions on interest-only lending that was introduced by Australia’s banking regulator, APRA in March this year. This has been one of the major contributing factors to the decrease in housing prices.
Currently, the market is oversupplied and is now suffering from a surplus of houses on the market, meaning investors and first home buyers are no longer rushing to purchase a house as they can search and buy at their leisure.
These factors, as well as a pullback from foreign investors in recent weeks, has indicated that we are now past the peak in the housing market.
These figures and results from this month and last coincide with what UGC forecast back in October. You can view that article by clicking here.