The possibility of an apartment market meltdown, however, remains a concern.
HSBC chief economist Paul Bloxham said in the paper that after 10 per cent growth in 2015 – and 30 per cent growth since 2012 – Australian house price growth was “cooling”.
“National housing growth will run at low single-digit rates this year and into 2017,” he said.
Indeed, growth had slowed notably since October, he said, with Sydney and Melbourne house prices showing no growth at all.
By contrast, in the years since 2012, housing prices had risen 46 per cent in Sydney and 32 per cent in Melbourne.
However, “to some degree” the detached housing and apartment markets were separate, he said, as housing buyers did not want to live in an apartment, and vice-versa.
“So a possible decline in apartment prices, due to oversupply, would not necessarily translate into a matching fall in detached housing prices,” he said.
Mr Bloxham added that the detached housing market is not over-supplied, and the overall housing housing market is not yet showing signs of being over-supplied.
Australians are getting smarter at paying down their $1.5 trillion worth of outstanding home mortgages by increasing the use of offset accounts and taking advantage of lower interest rates a new mortgage report by Deloitte says.
The report which takes in the views of lenders such as ANZ, Macquarie Bank, AFS, Pepper Group, Resimac and ING Direct showed that the vast majority expected house price growth would plateau over the next 12 months. The next most popular view was that there would be continued growth, but at a lower level than 2014-2015.
Deloitte’s Australian Mortgage Report released on Thursday shows that at the end of 2015, two-thirds of home borrowing was covered by at least one month’s repayment buffer and that about a third of the loans had a buffer greater than 12 months. The comments echo a Reserve Bank study which argued concerns over household debt were overblown.
Deloitte’s financial services partner James Hickey said Australians had become a lot smarter about how they paid down their mortgages by increasing their use of offset accounts – a bank account linked to a home loan where the credit in it can be used to reduce interest payable on the home loan.
“Customers continued to use the low interest rate environment to pay down their loans, particularly through off-set accounts, and grow increasingly savvy as to how best to use them instead of traditional redraws [and] pay down structures,” Mr Hickey said.
“Offset accounts grew faster than any other type of account in 2015 and currently make up approximately 6.5 per cent of at-call transaction accounts,” Mr Hickey said.
While borrowers have been benefiting from the lower cost of funding Deloitte’s funding practice leader Graham Mott has hinted at a slightly more challenging borrowing environment because of the increase in costs for banks themselves to borrow.