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Home buyers urged to capitalise on lower prices while they still can

Buyers still have a chance to snag homes at well below prices being paid two years ago, but their window of opportunity could be closing due to recent market changes.

Sydney’s housing market has dropped 15% since 2017, but it is set to be reawakened soon with interest rate cuts producing ideal conditions for up-sizing families and first home buyers.

The cut rate is said to give new buyers an average saving of $700 per year in repayments. The cash rate is the lowest since the 1960’s.

The increased demand is meant to stop prices from falling but will not drive another boom due to the weakening economy.

Experts are hoping for much needed stability after years of boom to bust conditions. Buyers and sellers would get more certainty about pricing.

“It will be a flat market, not a rising one,” My Housing Market economist Andrew Wilson said. “A flat market … is good for everyone.”

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Sydney becoming more affordable as property prices, rents and rates continue to drop

Things are finally looking up for Sydney’s long frustrated home seekers – buyers are spending less of their money on repayments and it’s quicker to save a deposit.

New buyers need to divert less of their income into repayments, now 46% of their income, down from more than half two years ago.

With the Reserve Bank of Australia announcing Tuesday a record cut to the cash rate, mortgages are set to become even more affordable. Several banks passed the cut on in full to their customers.

The average time it takes a buyer to save their 20% deposit has shrunk from 13 years to roughly 11. Assuming they earned the average household income of $94,588 per year.

The gains represented the first time Sydney’s housing market showed a prolonged improvement in affordability in nearly seven years.

The median price of a Sydney home has dropped close to 15% since the market peaked in July 2017 and is now about $808,000.

Home buyers are being helped by more affordable rents, which are making it easier to save. A home at Sydney’s average rental price will now chew up 32% of the average household’s income, down from 34% two years ago.

Home owners could also expect further improvements in affordability as prices continue to drop…

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