Sydney home values have fallen 13.4 per cent from their January 2022 peak,but the pace of that fall has been slowing. In February,values rose 0.3 per cent,the report shows,and all other capitals besides Hobart had values fall by less than half a per cent over the month.
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Lawless said the apparent plateauing of home-value movement had coincided with consistently low numbers of advertised properties and an increase in auction clearance rates.
“So far,it seems prospective vendors are prepared to wait this downturn out. The flow of new listings is well below average for this time of the year across each of the major capitals,” he said.
“This trend towards a below-average flow of new listings has been evident since September last year.”
There have been concerns among economists that the fall in house prices over the past year,coupled with high inflation and falling real wages,would translate to more people falling behind on their mortgage repayments.
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But analysis from Moody’s Investor Service released on Tuesday suggests the overall property market is still in relatively strong shape.
Moody’s vice president Irene Kleyman said risky lending across the Australian banking sector had declined since the global financial crisis in 2008.
Risky high loan-to-value ratio mortgages,interest-only mortgages and loans to people with adverse credit histories had all fallen over recent years.
Kleyman said tighter macroprudential regulations,such as the 3 per cent interest rate buffer on mortgages,had also improved mortgage quality.
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She said this was an important development given the likely slowdown in the economy.
“We expect mortgage delinquency rates will increase over 2023 because rising interest rates,high cost-of-living pressures and the slowing economy will weigh on borrowers’ capacities to repay debt,” she said.
“However,the risk of mortgage delinquencies would have been far greater if loan quality,underwriting standards and lenders’ propensity to support borrowers had not improved since the financial crisis.”
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