Australia’s housing market slowdown is set to continue over the rest of the year and into 2017, according to a new paper from HSBC, but it shouldn’t cause a household debt crisis as a result. Read more: Follow us: @smh on Twitter | sydneymorningherald on Facebook

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”.

HSBC chief economist Paul Bloxham  says  Australian house price growth is "cooling".HSBC chief economist Paul Bloxham says Australian house price growth is “cooling”. Photo: Louie Douvis

“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.


'The risk of a potential over-supply of apartments is largest in Melbourne and Brisbane.'

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.

With house prices starting to ease in capital cities and banks increasing the cost of borrowing outside of official interest rate movements the behaviours of home owners are being monitored closely.

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.

Australians are getting smarter at paying down their $1.5 trillion worth of outstanding home mortgages.
Australians are getting smarter at paying down their $1.5 trillion worth of outstanding home mortgages. Rob Homer

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.

Courtesy of LJ Gilland Real Estate


About ljgrealestate 据联大

Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085.
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