Australia’s housing slump enters year two – Bloomberg

As reported by Bloomberg, Australia’s housing market slide is entering its second straight year as lending constraints and shaky buyer sentiment sees home prices slipping further for October.

Key quotes

“Sydney and Melbourne, the hottest markets when property prices were surging, are now leading declines. Prices in Sydney are down 7.4 percent from a year earlier, while Melbourne’s market is off 4.7 percent.

Credit availability is the biggest factor weighing on the market. Regulators have tightened restrictions on riskier loans, such as interest-only mortgages which are popular with property investors, while also enforcing stricter expense verification, which is reducing the amount people can borrow.

With credit harder to come by and little prospect of capital growth, investors are exiting the market, a boost for owner-occupiers and first-home buyers.

Inventory levels are increasing as sales slow and more properties come on to the market. As buyers gain a stronger hand, price declines are expected to continue through the peak November and December selling season, CoreLogic said.”