CoreLogic’s head of research Tim Lawless attributed the low growth primarily to tighter restrictions on lending. “Lenders have tightened their servicing tests and reduced their appetite for riskier loans, including those on higher loan-to-valuation ratios or higher loan-to-income multiples,” he said. He added that more expensive rates on interest-only loans were acting as a disincentive for property investors, particularly those that offered low rental yield.
However, it’s certainly not all doom and gloom. Despite the recent depreciation, house prices in Sydney are still 7.7 per cent higher than they were a year ago; Melbourne’s continued growth can be put down to a record-breaking migration rate which is creating strong housing demand but also slowing.
As a general rule, long-stable prices in non-metro regions continue to attract buyers deserting the now out-of-reach major city property markets.
