An interesting article in the AFR on April 2 - saying units are rising at a faster rate than houses!
The growth rate for units and lower value houses have gathered momentum in the past three months, with values in the lower end jumping by 3.1 per cent, nearly five times faster than the upper end.
A main reason is that more downsizers seeking to reduce their mortgage are joining the buying frenzy! Says Ivan Kaye of BSI Finsnce.
A number of our clients are downsizing to reduce their debt due to increased interest rates .
Speaking to a financial adviser at Ark was a gamechanger for Jane (name and suburbs changed)
Jane , who was planning to retire in 8 years had built large equity in her home but was struggling with cash flow. She sold her large family home to relieve financial pressure.
“I just wanted to get rid of my mortgage and buy something smaller but comfortable and be able to sleep at night.” said Jane
Jane sold her house for $2.5 million, bought a unit for $1.5 million in Leichardt and put the money in Super - enabling her to be able to retire comfortably!
Tim Lawless - Research Director of Corelogic has said that demand for affordable homes has started outperforming the top end from last year - in each of the major capitals.
“With housing affordability becoming more challenging and borrowing capacity lower than a year ago, it’s no surprise to see demand being skewed towards the middle-to-lower end of the value spectrum,” Mr Lawless said.
“Originally, it was mostly investors and first-home buyers competing for those stock, but anecdotally at least, people are looking to reduce their debt, and maybe take advantage of the strong capital gains and cash out, downsize or move to a cheaper location where they can reduce their leverage.”
In Brisbane, house prices rose by an average of 7.4 per cent in Kingston, Riverview, Logan Central and Leichhardt in the Ipswich and Logan districts, where median values remained below $600,000.
Those were in stark contrast to the weaker performance in Brisbane’s upper end suburbs such as Hamilton and Ascot, where median prices reached $2.3 million and $2.5 million respectively. In the past three months, house values dropped by 3.7 per cent and 2 per cent respectively.
“A lot of downsizers are cashed up, so they can bid up and drive values higher in that segment of the market,”
“Depending on the suburb, big townhouses, a three-bedroom semi-detached house or apartments are highly sought-after by downsizers, making it harder for investors and first-home buyers to compete.”
Let me know if you are interested to buy or refinance your property by clicking here and contacting me at bsi finance
Source - Australian financial review And CoreLogic
Let me know if you are interested to buy or refinance your property by clicking here and contacting me at bsi finance
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