Slowing housing market may mitigate need for stricter lending: CoreLogic

author-avatar By
on December 16, 2021 Fact Checked
Slowing housing market may mitigate need for stricter lending: CoreLogic

There may be no need for further interventions around risk in lending according to CoreLogic.

In its Best of the Best report CoreLogic said it is likely property value growth and sales activity have already peaked.

"Affordability constraints have worsened, vendor activity has surged toward the end of the year, and the housing finance space is currently showing signs of tightening and slowing," CoreLogic said.

The accumulated force of these individual headwinds have led many of the major banks to forecast softer growth outcomes for 2022, while also expecting tighter lending conditions for borrowers. 

In October, CBA and ANZ predicted tighter macro prudential policies were coming in the near future. 

However CoreLogic's report said, "a slowdown in buyer and seller activity also mean a slowdown in debt accrual for Australian households."

"This may also mitigate the need for further interventions around risk in housing lending, following the increase to serviceability assessment buffers for borrowers by APRA in October. "

Despite the stellar growth in 2021, CoreLogic also highlighted a slowdown in borrowing in the second half of 2021. 

"In the three months to October, ABS housing finance data showed total values secured for the purchase of property fell -6.3% compared to the previous quarter, led by a decline in housing finance secured by owner-occupiers (both first home buyer, and non-first home buyer owner-occupier finance fell)," the report said. 

Screen Shot 2021-12-16 at 10.14.25 am.png

2021 in review

Nationally, dwelling values recorded an annual appreciation of 22.2%, the highest increase since 1989 according to CoreLogic data. 

In addition, sales volumes climbed to an estimated 614,635 in the past 12 months, the highest level in almost 18 years.

Ms Owen said the estimated value of Australia’s residential real estate had gone from $7.2 trillion at the end of November 2020, to reach a record high of $9.4 trillion in just 12 months.

“Strong housing market performance over the year was driven by multiple factors, including low interest rates, fiscal and institutional support for households, high household savings and relatively low levels of advertised stock,” she said.

“Rates of housing turnover had also been relatively low for some years before these factors boosted housing demand, which may also explain the elevated volume of sales in the past 12 months, which at November was 32.6% above the decade annual average.”

Change in Dwelling Values

Month Quarter Annual Median Value
Sydney  0.9% 4.3% 25.8% $1,090,276
Melbourne 0.6% 2.4% 16.3% $788,484
Brisbane 2.9% 7.4% 25.1% $662,199
Adelaide 2.5% 6.5% 21.4% $558,540
Perth 0.2% 0.4% 14.5% $528,540
Hobart 1.1% 5.5% 27.7% $676,595
Darwin -0.4% 0.2% 16.7% $493,047
Canberra 1.1% 5.0% 24.5% $882,519
Combined Capitals 1.1% 4.0% 21.3% $783,557
Combined Regional 2.2% 5.9% 25.2% 527,322
National 1.3% 4.4% 22.2% $698,170
Source: CoreLogic

Brisbane finishes the year as Australia's fastest growing property market

Core Logic data shows Brisbane dwelling values rose 2.9% over November and 7.4% over the quarter, its highest rate of quarterly growth since 2002.

While Sydney and Melbourne have experienced a plateau to end the year, Brisbane ploughed full steam ahead according to Core Logic’s Best of the Best report.

Brisbane’s annual growth now sits at 25.1%, just below Sydney’s growth of 25.8% and well above Melbourne’s annual growth of 16.3%.

Highest total value of sales Brisbane

Suburb Region Number sold (12m) Sept 2021 Total value (12m) Sept 2021 Median value Nov 2021
1 Cleveland Brisbane - East 356 $367,635,171 $883,170
2 Camp Hill Brisbane - South 282 $362,757,747 $1,359,254
3 North Lakes Moreton Bay - South 585 $350,374,750 $675,413
4 Redland Bay Brisbane - East 475 $337,318,885 $749,275
5 Thornlands Brisbane - East 430 $337,173,349 $785,774

Source: CoreLogic

Highest 12 month change in values

Suburb Region Annual Change Median Value
1 Indooroopilly Brisbane- West 41.8% $1,386,937
2 Newmarket Inner City 40.5% $1,314,552
3 Teneriffe Inner City 40.5% $2,379,902
4 Sherwood Brisbane - West 38.7% $1,386,670
5 Hawthorne Inner City 38.5% $1,858,992
6 Taringa Brisbane - West 38.3% $1,421,929
7 Everton Hills Moreton Bay - South 37.6% $862,509
8 Carindale Brisbane - South 37.2% $1,299,519
9 Hamilton Inner City 37.1% $2,106,348
10 Corinda Brisbane - West 36.8% $1,137,752

Source: CoreLogic

Also read: Brisbane suburbs to watch in 2022


Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS
NSW/VIC/SA METRO & INNER REGIONAL AREAS

Variable Home Loan (Principal and Interest)

  • $5000 Cashback. T&Cs Apply.
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
NO ONGOING FEESFREE REDRAW FACILITY
  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
NO ONGOING FEESFREE REDRAW FACILITY

Live-in Variable Loan (Principal and Interest) (LVR < 90%)

  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 25, 2022. View disclaimer.


Image by Robert Ruggiero via Unsplash

Latest Articles

author-avatar
Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy