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Homeowners across Australia have been relieved as the Reserve Bank of Australia (RBA) kept the cash rate unchanged this month due to softer inflation figures. The autumn property season has been slower than usual, with many buyers and sellers taking a “wait and see” approach. The number of new listings has decreased compared to previous years, as sellers hesitate in the current climate. According to CoreLogic, house prices in the country have decreased by 7.9% over the past year to February, which is the largest 12-month decline ever recorded. Nevertheless, for prospective buyers who are in a position to purchase, there are opportunities to be found.
At its April meeting, the RBA maintained the cash rate at 3.60%, following ten consecutive rate increases since May 2022. The latest inflation figures from the Australian Bureau of Statistics (ABS) suggested a possible pause in the cash rate hike. The ABS’s monthly consumer price index showed that annual inflation decreased to 6.8% in February, down from 7.4% in January and 8.4% in December. Additionally, the recent collapse of a significant US bank, the Silicon Valley Bank, fueled the argument that the RBA’s sequence of rate rises might be drawing to a close.
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According to CoreLogic, national house prices rose for the first time in 11 months in March, with home values increasing by 0.6%. Sydney and Melbourne led the growth with 1.4% and 0.6% increases, respectively. However, smaller markets like Darwin and Hobart are still experiencing a decline in property prices. In certain suburbs of Sydney, the housing stock shortage due to vendors’ reluctance to sell has raised competition for properties, forcing buyers to pay more, resulting in record prices being paid for homes in at least 20 suburbs in February and March.
CoreLogic’s research director, Tim Lawless, stated that several factors are driving up property prices, including lower than average stock levels. He added that “although interest rates are high and there is an expectation that the economy will slow through the year, it’s clear other factors are now placing upwards pressure on home prices.” Capital city listing numbers ended in March almost 20% below the previous five-year average, with advertised supply being below average since September last year. Purchasing activity has fallen, but not as much as available supply, as capital city sales activity was estimated to be approximately 7% below the previous five-year average through the March quarter.
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* Monthly Home Values figures as of 31 March 2023
* Australian auction results, clearance rates and recent sales for the week ending 9 April 2023
* The clearance rate is preliminary and current as of 11.50pm 12 April 2023
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