Will Markets Remain Resilient as Headwings Grow?

Despite a softening economic climate in the first half of 2019, residential prices have generally held up across the Asia-Pacific region. This was led by the North Asian markets which either benefitted from major infrastructure improvements or had supportive demand supply fundamentals.

Australia’s residential prices continued to cool following tightened lending conditions, although prime property continued to record growth. Sydney and Melbourne were the most impacted with mainstream homes both falling 9.9% year-on-year in Q1 2019. However, there have been some positive stimulus such as the Australian Prudential Regulation Authority (APRA) encouragement to loosen the loan serviceability assessment; in effect allowing more home buyers to borrow. Furthermore, the recent Coalition election victory has limited the risk of changes to negative gearing policies and the capital gains tax regime, followed by two cuts to the cash rate. All of which has since sent positive waves through the residential market.