Spring has ushered in a season of anticipation and dynamism, both for aspiring property buyers eager to enter the market and vendors eager to secure a sale. Traditionally, the real estate market experiences a surge in activity during this period, and signs of this resurgence are already apparent in the intensifying auction landscape.
In the inaugural week of spring, a remarkable surge was observed, with over 2,400 properties slated for auction—a substantial 13 percent increase compared to the corresponding period in 2022. This surge can be attributed to rising property prices, which have emboldened vendors, instilling them with greater confidence to list their properties for sale.
In the realm of financial news, the Reserve Bank of Australia (RBA) has recently extended its pause on the cash rate, a development that has brought considerable relief to mortgage holders. If you’re contemplating a property purchase this spring, don’t hesitate to engage with us to explore finance pre-approval options tailored to your needs.
Turning our attention to interest rates, the RBA convened in September, deciding for the third consecutive month to maintain the cash rate at 4.1 percent. The RBA’s outgoing Governor, Philip Lowe, noted that inflation had surpassed its zenith, as evidenced by the July Consumer Price Index (CPI) figures, which indicated a continued decline. Lowe underscored the role of higher interest rates in establishing a more sustainable equilibrium between supply and demand in the economy. In light of these factors and the prevailing economic uncertainties, the RBA opted to keep interest rates unchanged, affording more time to evaluate the impact of prior rate increases and assess the economic outlook.
With Michele Bullock set to assume the role of RBA Governor from September 18, there is keen interest in her potential approach to the cash rate in the coming months. It is worth noting that when Philip Lowe took office as Governor in September 2016, the RBA maintained the cash rate at the same level for 29 consecutive months. Speculation abounds about whether Ms. Bullock will follow a similar path, concentrating on revamping the RBA in response to recent reviews, or if the RBA may contemplate reducing the cash rate within the next year.
This juncture presents an opportune moment for homeowners to review their home loans, ensuring they align with their financial circumstances and future aspirations.
In terms of property market dynamics, the housing sector has sustained its upward trajectory throughout August, with property values escalating by 0.8 percent for the sixth consecutive month. Almost all major cities experienced a surge in property values, except for Hobart, which saw a marginal dip of 0.1 percent. Brisbane led the charge with a robust 1.5 percent increase, closely trailed by Sydney and Adelaide, where property values appreciated by 1.1 percent.
Tim Lawless, the Research Director at CoreLogic, emphasized that while housing values generally exhibited an upward trend, there were regional variations. Sydney, for instance, led the resurgence with an impressive 8.8 percent gain since property values bottomed out in January. Brisbane also demonstrated a robust recovery, with values rising by 6.2 percent since February.
Conversely, some capital cities experienced more subdued growth, with Hobart’s property values remaining static since stabilizing in April, and the ACT seeing a modest 1.0 percent increase since April. These are also the only two capital cities where the supply of advertised properties has exceeded the previous year’s figures, suggesting a recalibration in the dynamics between buyers and sellers as a contributing factor to value stability in these areas.
In regional markets, conditions were mixed, with property values experiencing slight declines in non-capital city regions of New South Wales (-0.2%) and Victoria (-0.6%). In contrast, regional Queensland (0.8%) and South Australia (0.9%) recorded notable gains, while regional Western Australia (0.1%) and Tasmania (0.0%) exhibited relatively stable values.
For those who have been patiently awaiting the right moment to make a property purchase, we encourage you to engage with us today. We can guide you through your home loan options and facilitate the pre-approval process to set you on the path to your property aspirations.