Local housing bubble won’t pop but deflate slowly
The recent NSW budget has estimated some respite for Sydney’s surging housing prices, with NSW house price growth expected to moderate over the next year to an annual rate about 3% to 5%, down from 11% in the past 12 months. As per the NSW budget, the recent clampdown by regulators such as the Australian Prudential Regulatory Authority is expected to ease the housing market, while new Commonwealth measures are expected to moderate activity in the housing market in 2017/18. Further, rise of an interest rate and slow wages growth expected to soothe housing demand. Another probable cause of the slowdown is a reduction in demand from foreign property buyers who will be the big losers from the NSW state budget as the government doubled the foreign investor transfer duty surcharge to 8% from 4% and land tax will increase ~$900 million in the next four years.
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