2015 has been an amazing year for brokers. As the year draws to a close it has a feel that the action is moving to new sectors of the property market.
Source: Corelogic RP Data
The current growth cycle started around June 2012, with national dwelling values shifting almost 32 per cent higher. The rate of capital gains has been led by Sydney where values are almost 50 per cent higher and Melbourne where dwelling values have shifted 35 per cent higher over the cycle to date.
There was then clear daylight with the other capital cities. Brisbane has seen the third highest rate of value growth over the period at a comparatively modest 14.5 per cent.
The general consensus is that we are at the top of the market in many key markets, for two reasons:
- Valuations in Sydney and Melbourne are looking stretched
- Regulatory changes are forcing the banks to be more conservative in their lending policies
Yet, there is still optimism for the sector; albeit in different locations. Corelogic RP Data analysis shows that, in the cities that have grown most, the largest growth has been in the top end of the market (see below). This creates ‘spillover’ opportunities in markets such as Brisbane, Newcastle and Adelaide.
Accredited Broker sees opportunities for NSW and VIC brokers arranging top-up loans tapping into equity in Sydney and Melbourne which will be used as deposits on investment properties in places such as Adelaide or Brisbane, where the average house price is $425,250 and $475,000 respectively. (Of course we also see good brokers arranging loans on these investment properties too)
But, across the country, the future for mortgage broking remains bright. More-and-more Australians are using brokers rather than just going to their local branch. And, globally the property market remains robust, buoyed by ultra-low interest rates. In a recent speech, Reserve Bank Governor, Glenn Stevens, said “My guess is that global interest rates are still going to be very low for a good part of the decade ahead.”
And, even in markets perceived to have peaked, there is still demand. In a survey of NSW division of Australian Property Institute 44 per cent of industry respondents thought that the Sydney market would run another six months, while 33 per cent expected another year.
And with healthy competition amongst the banks for owner-occupied loans, Accredited Broker sees brokers across the country heavily involved in refinancing owner-occupied properties.
2015 has been a stellar year for mortgage brokers and 2016 looks to be another good one – albeit different.
All of us at Accredited Broker wish you a merry Christmas and a happy New Year. We look forward to seeing you in 2016.