Chris Joye of Coolabah Capital put his neck on the line in predicting that housing values would either move sideways or drop by no more than 5 per cent from their peak, before resuming their cyclical boom in the second half of 2020.
In April he’d have been heartened to see a rise in prices for Sydney and a number of other cities, albeit not in Melbourne, where there was some price discounting (especially in the upper price quartile).
A look back at the March 2020 lending finance figures partly helps to explain why prices have held up to date.
Total housing lending ex-refinancing was up only modestly on the month, but was some +17.5 per cent higher than a year earlier.
The solid result was driven by homebuyer lending (ex-refi), which was +22.5 per cent higher year-on-year.
First homebuyer numbers hit the highest level in a decade at a shade under 10,000, driven by first homebuyer incentives and another surge in New South Wales (now some +40 per cent year-on-year).
Indeed, the value of owner-occupier approvals to buy existing dwellings hit a record high in New South Wales.
Every other state and territory except for the NT recorded a modest decline in homebuyer lending for the month of March.
The Sydney skew meant that the average loan size to buy an existing dwelling hit a record high of $511,000.
Year-on-year loan sizes for the purchase of existing dwellings were up most in New South Wales (+25 per cent) and Victoria (+20 per cent), partly due to a low base effect.
Construction loans have dropped away sharply now (down -6 per cent over the year for owner-occupiers) as new supply dries up.
And lending figures will inevitably be lower in April as bank phone lines have been like clogged arteries – due to all the refinancing and payment holidays being taken – and processing times have blown out.
But there’s also been a very sharp reduction in new stock listings, so it’s little wonder prices haven’t budged much to date.
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