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Prices are set to cool across Australia

Image result for property Prices are set to cool across AustraliaAustralians looking to buy a house in the near future can breathe a sigh of relief. According to recent findings, house prices in Australia’s property hotspots should soon stabilise after the last few years of intense momentum.

Housing values in Australia have been soaring over the past year, with the combined capital cities recording an 11.3 per cent increase in the 12 months to September, according to CoreLogic RP Data.

Unsurprisingly, this has been primarily thanks to Sydney and Melbourne. The Housing Outlook Report from QBE outlines that both these cities experienced respective median house price increases of 56 per cent and 33 per cent between June 2012 and June 2015.

These are immense figures, and has made it difficult for some house hunters to buy a home in these popular locations, even when accommodated by record low interest rates.

Dousing the fire

Fortunately, things are set to change dramatically. The report predicts that housing prices could cool significantly in the next few years. For instance, the median house price in Sydney and Melbourne, experienced respective increases of 22.3 and 15.7 per cent this year – a stunning result. However, these growth figures are forecast to drop sharply to 7.3 per cent and 4.9 per cent.

This can be attributed to the Australian Prudential Regulation Authority pressuring banks to curb loaning to investors. According to the QBE release, investment finance makes up half of all residential home loans. Squeezing some of these buyers out has lowered real estate demand and in turn, market heat.

House prices are predicted to stabilise even more in 2017 and 2018, with Sydney’s median house price forecast to actually decrease. This will help to correct the dropping affordability of housing in these regions.

Whether you’re looking at homes for sale today or a few years down the road, always have an experienced real estate agent by your side to help you navigate these uncertain waters.