Signs are positive for Australian property markets with prices set to gradually improve in the second half of this year, according to one of Australia’s largest mortgage insurance companies.
Genworth expects recently lowered interest rates coupled with other economic stimuli to halt the slipping housing prices experienced earlier in the year some markets, particularly in Sydney and Melbourne.
Genworth chief executive Georgette Nicholas points to the drop in the official interest rate to 1%, government tax cuts, APRA changes to serviceability rules and state and federal infrastructure investment as contributors to a promising economy underlying real estate demand. “The rate of price decline has really slowed over the last three months and we have got to a point of stabilization where buyers are starting to come back into the market,” she says. “People who may have been sitting on the sidelines are able to get in because of the previous home price depreciation.”
Genworth provides lenders’ mortgage insurance, which covers banks from default by riskier borrowers or those with smaller deposits.