Buy soon, pay later

Would-be home buyers are being advised to make their move before government support dries up and prices rise too much

- DARREN SNYDER

The first week of November brought us the Melbourne Cup and the Reserve Bank’s official cash rate cut to 0.10%. While it was great news for those with a mortgage (provided your lender passed on the cut), astute housing market followers will know of other data released during that week that wasn’t so rosy.

According to several economic experts polled by comparison website Finder, sentiment around housing affordability has dropped rapidly to almost pre-Covid-19 levels. The consensus is that Australia’s economic recovery from the pandemic will be faster than in other countries, meaning house prices will continue to climb nationally for at least another two years and put homeownership out of reach for many Aussies.

Momentum for this upward trend in house prices already exists. CoreLogic data shows house prices across Sydney, Melbourne, Brisbane, Adelaide, and Perth have collectively increased by 3.1% in the 12 months up to that first week in November.

Graham Cooke, insights manager at Finder, says although most experts think house prices in some of these capital cities are overvalued, continued low-interest rates combined with government financial support for home buyers is enough to prop up those markets.