According to CoreLogic RP Data's executive general manager – property and partnerships, Greg Dickason, the Australian property market is currently in “a pretty healthy position nationwide” and this looks set to remain so.
“The market is looking a bit softer than the euphoria of last year, but it’s still looking pretty good,” Mr Dickason said.
“We think the market is still in a pretty strong position and in fact, there’s probably less of the irrational exuberance and more of the sustainable volumes than we were having last year, which is a good thing.”
However, Mr Dickason said he remains a little concerned about rental yields getting compressed.
“We are seeing that a lot of the rental yields have been dropping steadily across most of the major cities and that’s obviously a concern in terms of the sustainability of house price growth because one of the key factors is ‘Are you getting the right rental returns?' – especially if you’re an investor,” he said.
“But what is quite encouraging is that there’s a lot more owner-occupiers back in the market. The latest stats out of the RBA showed that there are some good owner-occupier volumes coming back.”
Mr Dickason believes property is going to “be a lot more interesting market this year”.
“Are we going to see interest rate changes? Are we going to see the banks change interest rates even though the RBA doesn’t? I think that’s quite possible that you might see out-of-cycle interest rates from the banks but I think you’ll also see the banks chasing quality,” he said.
“Quality is a low-to-value ratio loan to an owner-occupier – that’s going to be the prize – so if you’re one of those people, you’re most likely to be approved and will get the best interest rates.”