The Central Coast property market is once again bucking the trend when it comes to doomsayers predictions of property prices decreases.
Regional markets have actually risen slightly according to latest data from CoreLogic. The combined regionals index continued to show positive growth, rising 0.1% over the three months to June.
Central Coast top real estate agent, Cathy Baker of Belle Property Central Coast, recently spoke with The Daily Telegraph about the market.
“We’re not seeing a decline in prices, it’s just a little slower and there are less buyers,” she said.
It’s natural that following a boom and incredibly hot market that some buyers have delayed their property purchases due to high competition levels, skyrocketing property values and RBA cash rate increases. Buyers who haven’t purchased before are generally nervous when there is an increase in negative media commentary around the property market.
Whilst the media might be all doom and gloom, the word on the street and sales data tell a very different story.
CoreLogic’s latest data also show that sales activity remained above average throughout the June quarter.
To see what properties have sold on the Central Coast recently, click here.
Experienced investors taking advantage of the quieter property market
Let’s face it, the media haven’t painted a pretty picture of the property market, but experienced buyers and investors are enjoying a property market that puts buyers in the driver’s seat.
Central Coast Mortgage Broker and Director of Mint Equity, Zac Peteh said he’s seen experienced investors taking advantage of the current property market. “We’ve seen a switch of buyer types over the last few months, owner occupied buyers are delaying their purchases till later in the year, whereas investors are securing their home loan approvals now to take advantage of the buyer market.”
With less buyers out in the market, those who are ready to buy can now negotiate better terms and pricing. Whilst the values aren’t dropping at a high level data level, we are seeing pricing barriers becoming more prevalent. For example, a property that might have sold for $1,000,000 four months ago, may only sell for $980,000 – dropping below a psychological numeric barrier of buying for under $1 million.
Buying is still cheaper than renting (even with interest rate increases)
Even with all the government schemes and 35,000 new FHLDS places being released on 1 July, First Home Buyers are waiting nervously on the side line. However, rents have been rising fast than housing values for five months now, so whilst buying your first home can be daunting with the fear of interest rate rises, the rental increases are still making buying cheaper than renting.
Property fire sales very unlikely
For anyone hoping to snap up a bargain from distressed sales will be bitterly disappointed. The best you can expect is a 10-20% discount on the pricing. Even if there was a 20% decline in home values, it would only bring the property values down to January 2021 levels.
Tim Lawless of CoreLogic commented they were highly uncertain around how far values will fall, because there were strong mitigants to support a stabilised property market including;
Strong labour markets will be one key factor in supporting mortgage repayments and keeping distressed listings off the market
Borrowers have an estimated 21 months of repayment buffer on their mortgages meaning most households have a significant safety net if temporarily faced with a change in circumstances
All borrowers have been assess under a mortgage rate scenario 2.5% higher than the actual interest rate and since October 2021, this increased to a buffer of 3% - that means they were assessed at much higher interest rates when they secured their home loan.
Click here to read more about the CoreLogic Home Value Index for June 2022.