CoreLogic’s latest Home Value Index shows that while the housing market downturn has evened out with an annual growth rate of 2.2% across the country, more fresh stock is being added – promising more choice for buyers this spring.
Compared with August 2021, 13.4% more fresh housing stock was listed for sale last month and the trend is running 6.5% above the five-year average.
Similarly on the Central Coast, we have experienced more stock coming to the market, giving buyers more options. We are seeing properties hit the market as vendors and landlords alike look to sell their assets in the wake of consecutive interest rate rises.
While this might appear daunting for people purchasing a property, as prices are continuing to soften, buyers are requiring smaller loans.
After gaining 40% during the pandemic, regional prices are dropping to catch up to the cities
Regional properties experienced strong price growth throughout the pandemic, but have now started to mirror the rates of decline being experienced across city real estate.
Values in regional areas were down by 1.5% in August, compared with 1.6% across the combined capitals. However, after gains of 40% between March 2020 and March 2022, this should hardly concern regional homeowners.
The largest falls in regional home values have tended to be in the areas that are closest to cities. This includes the Central Coast, and other areas that are the ‘most commutable’ according to CoreLogic. It’s no coincidence that these were the lifestyle areas that increased the most during the pandemic, so now there’s a predictable adjustment taking place.
Most owners well buffered against downturn
Across our capital cities and regional areas, home values remain 15% above the levels recorded in March 2020. The implication is therefore that most homeowners have a significant equity buffer before their home is likely to be worth less than what they paid.
With many homeowners having paid at least a 10% deposit and having paid down a portion of their principal, the risk of widespread negative equity remains low.
Housing prices are not anticipated to stabilise until interest rates find a ceiling and consumer confidence starts to improve.
That said, if you are a homeowner, your property is worth more than it was two years ago.