RTR4A1PF
A real estate agent's sign outside a house shows that it has recently been sold, in Sydney October 13, 2014. Frothiness in Australia's property market has triggered central bank warnings of regulatory steps to rein in loans to investors, but the nation's banks are turning a deaf ear, sceptical that any such action is needed or imminent. Lending to investors has jumped this year to its highestsince comparable records started in 1991, accounting for about half of Australia's residential loans in value terms. Investor interest has also helped pushed housing prices in Sydney and Melbourne to the point where most first-time home buyers are widely seen as priced out of the market. Picture taken October 13, 2014. Reuters/David Gray

The day booked for the national metropolitan property auction, which fell on the 8th of August, enjoyed massive attendance from the Chinese Australian community, who considers the date “lucky.”

The number 8, Ba in Chinese, has the similar pronunciation with Fa, meaning wealth and fortune.

“Auction numbers were 51 percent up on the same weekend last year in large part because many Chinese view transacting on the eight day of the eighth month as lucky,” wrote Chris Tolhurst of Domain News Australia.

This particular Saturday, auction day was also the biggest in the entire history of Melbourne, auction officials revealed. According to data released by CoreLogic RP, the local property market has already reached the AU$6 trillion mark, with Melbourne overtaking Sydney as the country’s best real estate performer since April. Capital gains in Melbourne surged by 6.1 percent in the past three months, while Sydney fell short at 5.4 percent.

“From January to July, the market grew by half a trillion dollars,” research head Tim Lawless said.

The value of each home across capital cities have increased by 2.8 percent in July and 11.1 percent better from the same period of 2013.

Helping the boost is the Australians’ increasing knowledge of the property sector, especially on knowing what property and insurance suits their economic status and financial capacity. Also, the influx of real estate mobile apps on the market is not only helping young property buyers to look for available properties across the country, but also helping them to understand the property market in general.

Among which is Born2Invest, a finance and business-focused app that is gaining immense popularity among real estate market followers despite being a newcomer in the market. Its 80-word summaries of international property market stories are perfect for smartphone users who are too busy to follow the news for updates on everything-real estate.

Tech critics have praised the app for its journalistic summaries, as the app “has successfully curated news articles from authoritative sites without dropping important details and losing the professionalism and sincerity expected of news articles.”

On possible market cooling

Australian banks are introducing new interest rates for property investors to drive the currently booming property sector away from a possible bust. Financial institutions will also introduce tougher loan-to-value standards in the hope of reversing the record-low interest rates obtained due to slowdown in the economy.

Experts say that the gradual decline in i nquiries from property investors last July could also be a sign of market cooling. Price gains in capital cities are also expected to ease to about a third of the yearly pace of 18 percent seen in the beginning of 2014 to the last day of July.

“All ingredients are in place now to spook the Sydney house-price momentum. It is better to cool the market rather than wait for the bubble to burst,” Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney, told Bloomberg.

In 2013, the Australian Prudential Regulation Authority urged banks to limit the growth in investor home loans, which accounted for 53 percent of all mortgages. In the same year, the Reserve Bank of Australia called the local property market “unbalanced,” raising alarms that the property boom is far from extending. Thanks to the Chinese investors flocking to Australia to diversify their assets due to the recent market crash in their country, numbers have significantly improved this month.

Contact the writer at feedback@ibtimes.com.au, or let us know what you think below.

RELATED STORIES