The REA Group Property Demand Index dropped by 4.3% nationally in April as cooling measures put forward by APRA and more expensive and restrictive lending by banks started to cut in. It’s likely that the Easter long weekend and ANZAC Day also had an impact.
Demand is still well above the same time last year and higher than the previous peak in November 2016. In December 2016, demand also dropped slightly when the banks increased interest rates independently of the RBA however, buyers ploughed back into the market in January and by March we hit another peak in demand.
It’s impossible to predict if this will happen again and if buyers are purely reacting to the changes. Time will tell as we head into winter.
New South Wales saw the biggest drop in buyer demand in Australia in April, driven by unaffordability cutting buyers out in Sydney.
So are we finally at the peak? It’s unlikely in Sydney, but lower levels of demand means that price growth will moderate and April median national house price data suggests the market slowed considerably during the month.
Rental demand also saw a decline in April, suggesting that high levels of investor activity has now provided sufficient rental housing. It’s likely that rental rates will also continue to moderate as a result.
Source: REA Group