No wonder the property market is going nuts…
According to new analysis from Betashares published by Business Insider, thanks to an historically low 0.1% cash rate, housing affordability in Australia is at its highest level since 2002.
This varies by city, with Sydney still being ridiculously unaffordable at around 34% of after tax income required to service a 25 year mortgage on your average house.
Melbourne is more in line with the Australian average of around 25% of after tax income.
This is significantly better than the long term average since 2004 of around 33%.
The article further states that improved affordability such as this is historically followed by a period of strong price growth until affordability falls again.
Does this mean we could see 10 – 30% price gains in the coming two to three years?
But what happens after that? Interest rates can’t possibly go any lower. So where does future price growth come from? Income growth and immigration? Unlikely. But time will tell…
This may be our final New Listings Email of the year so I’d just like to thank all our loyal readers and past clients for your support and encouragement during a very eventful and at times challenging year.
We’ve been incredibly fortunate to come through it having had a very strong, albeit lumpy year.
Team Fetter have sold 31 properties since lockdown ended about 10 weeks ago.
This is an incredible achievement and it’s been amazing to help so many happy clients navigate through uncertain times.
With the current momentum set to continue we are looking forward to a strong start to the new year.
Bring on 2021!!!