Shared equity scheme
Overall, the Aussie housing market continues to be battered by the salvo of interest rate hikes since May.
Hit particularly hard has been the most expensive quartile of the property market, and notably the areas which saw prices screaming higher through the pandemic.
The ultimate timing of the rebound remains uncertain for as long as interest rates are rising (though some areas are still faring quite well, in fairness).
But when the rebound does come, it will be driven by New South Wales, which has seen the biggest decline in median price to date.
Employment in NSW is now a thumping ¼ million higher than a year earlier, with record high employment in both Greater Sydney (2.87 million) and regional New South Wales (1.46 million).
Property market incentives for NSW
The New South Wales state government has already passed legislation stating that first homebuyers will be to opt out of paying stamp duty from January 2023 for properties priced up to $1.5 million, in favour of paying an annual property tax.
Now the launch of the shared equity scheme for qualifying key workers, single parents, and older singles underscores that the recovery will likely be driven by the bottom end of the housing market in Sydney and New South Wales.
The price caps for the shared equity initiative are lower at $950,000 in Sydney and $600,000 in regional New South Wales, and combined with the land tax reform will see the new year start off on a brighter footing for transactional activity in NSW.
Source: NSW Government
Unit prices and cheaper properties have generally held up better through this cycle's downturn, perhaps in part due to soaring construction and development costs, as well as reduced borrowing capacity pushing more buyers towards lower price points.
Asking rents for units in Sydney are up 23 per cent over the past year, which is probably a factor too.
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The S&P 500 is down a further -2.2 per cent today, taking the year-to-date return to -21 per cent.
The technology sector NASDAQ index has taken a beasting, dropping by just under -3 per cent today, bringing the year-to-date shellacking to around -34.5 per cent.
Tesla is grabbing most of the headlines, being down -69 per cent this year, but others have taken bigger hits, with one example being Coinbase, which has dropped by more than 92 per cent from its post-float high of $429.54 to a fresh 52-week low of $32.95.
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US 30-year fixed mortgage rates continued to inch down by a further 4 basis points this week, to 6.27 per cent.
Mortgage rates are now down by a cumulative 81 basis points from 7.08 per cent in late October, but they need to fall further to get market activity happening again.
