This is a question that many people looking to take out their first or next home loan are going to be asking themselves. While Sydney house prices moderated somewhat during the first half of the year, it appears there has been a rebound back into strong growth for the Harbour City. After a 3.1 per cent value rise over the month of May, the median home in the New South Wales capital now carries a heady $782,000 price tag, according to CoreLogic RP Data. That’s a figure that could be putting a lot of people off.
However, there are two things home buyers need to know. Firstly, that there are still plenty of homes below that high median figure. And, secondly, affordability isn’t all just about how expensive your new home is: it’s about how easy it is to service your mortgage.
While it might be tempting to buy into the doom and gloom, the fact is that this is actually one of the best years for affordability in recent memory. A report from the Real Estate Institute of Australia demonstrates that affordability across Australia has in fact improved to levels not seen since 2013 – and the most significant changes were seen in New South Wales.
But how can that be possible, you might ask. The fact is that the recent official cash rate cut and the resulting drop in interest rates from many lenders (Police Bank included) has created an environment where house prices are high, but monthly repayments are low. Paired with the current high levels of housing finance reported by the Australian Bureau of Statistics, it’s easier than ever to both procure and maintain a mortgage.
A bright future
Furthermore, even the current high prices of Sydney properties could soon be flagging. As part of its commentary on the recent cash rate decision, the Reserve Bank highlighted the enormous amount of apartments that are about to hit the market, many of which are located in Sydney.
This increased supply should help ease pressures on the housing market, moderating the value gains that the city has been experiencing. For those looking to buy a new or even their first property in the Big Smoke, this can only come as good news.
However, this is just the start of the story when it comes to the Sydney housing market. If you want to ensure you make the most of your mortgage, get in touch with Police Bank and get your financial future sorted!