Aussie Homeowners Gain Wealth
Australian homeowners experienced a significant wealth boost in FY2024, with dwelling values increasing by 0.7% in June, culminating in an 8% rise over the fiscal year, according to CoreLogic. The growth equates to a $59,000 increase in the median dwelling value, now standing at $794,000. The annual rise sharply contrasts with FY2022-23, where CoreLogic’s national index dropped by -2%. In that period, values plummeted by -7.5% in the nine months following May 2022, driven by a rising cash rate target. You may read the whole article here:https://bit.ly/3W7a5P9
Investors Return to Market
Eleonor Creagh, senior economist at PropTrack, highlighted the prospect of capital gains as a key factor drawing investors back to the market, supported by strong rental price growth which is maintaining rental yields. The value of new lending, excluding refinancing, increased for the third consecutive month in April, driven by improving housing market conditions since prices began to recover from 2022’s falls. The 4.8% monthly increase in new lending in April was the strongest since January 2022, with an annual rise of 24.6%, the largest since December 2021. You may read the whole article here:https://bit.ly/3L6o8xV
Property Market Shows Resilience Amid Challenges
Rachel Anderson, director at Herron Todd White (HTW), highlighted the enduring strength of Australia’s residential property market in the Month in Review report for June. Despite facing high inflation and economic uncertainties, the property market remains robust, with a consistent pattern of growth. “A lazy $750,000 in the national residential property market has to work hard across the nation as markets remain robust, proving property ownership aspirations to be resilient and rewarding,” Anderson said. You may read the whole article here:https://bit.ly/3xrsOLM
PopTrack Forecasts Property Growth
Australian property prices are on track to see an increase of up to 5% in 2024 following an already robust growth of 2.7% from January to May, according to PropTrack’s Property Market Outlook Report for June. The report highlighted significant regional disparities in property price growth.Perth continues to lead with a staggering 18.9% increase over the current financial year, with an additional 8% to 11% growth expected in the 2024-25 financial year. Other major cities are also showing positive trends, with Brisbane, Sydney, and Melbourne expected to see price rises between 3% and 6%. Adelaide’s market is projected to grow by 5% to 8% in FY25 after a 12.9% increase this financial year. You may read the whole article here:https://bit.ly/3XLXC4F
Inflation Surge Lifts Chances of Cash Rate Increase
The latest inflation figures are concerning, with the consumer price index rising 4% in the year to May 2024, increasing the likelihood that the Reserve Bank of Australia will raise the official cash rate. The CPI was up from 3.6% in April, according to the latest data released by the Australian Bureau of Statistics on Thursday, June 26. The biggest contributors to the May increase in CPI were housing (+5.2%), food and non-alcoholic beverages (+3.3%), transport (+4.9 %), and alcohol and tobacco (+6.7%). The latest inflation data arrives a little over a week since the RBA board met for its June monetary policy meeting, and decided to keep the cash rate at 4.35% – a position it has held since November 2023. You may read the whole article:https://bit.ly/3RIjFFx
Property Resales Hit 14-Year Profit High
Australian property resales hit their highest profitability rate since July 2010 in Q1 2024, driven by rising home values despite economic challenges and high mortgage rates. CoreLogic’s Q1 2024 Pain & Gain report, which analyzed around 85,000 resales, found that 94.3% of transactions recorded a nominal gain. Eliza Owen, CoreLogic’s head of research, reported an 8.5% increase in transactions from the same quarter last year and a 1.7% rise in national home values. The median gross profit decreased slightly to $265,000 from $268,000 in the previous quarter, attributed to more unit resales. Melbourne had the highest rate of loss-making sales among capital cities at 9.2%, up from 8.9% in Q4 2023. Adelaide and Brisbane were the most profitable, with only 1.6% of resales making a loss. Owen highlighted Perth’s turnaround, with loss-making sales down to 6.4% from 43.8% in June 2020. You may read the whole article here:https://bit.ly/3ziUZNs
Capital City Auctions Update
There were 2,074 capital city homes taken to auction last week, a slight decrease from 2,276 the previous week but higher than the 1,791 auctions held this time last year, CoreLogic reported. The preliminary clearance rate stood at 72.4%, marginally lower than the previous week’s rate of 72.9%, which was revised down to 65.5% once finalized. You may read the whole article here:https://bit.ly/3RJjVE5
Victoria’s Housing Ambitions
The Victorian government has unveiled proposed housing targets for each local government area (LGA) to achieve its goal of more than 2 million new dwellings by 2051, Property Council reported. Premier Jacinta Allan and Minister for Planning Sonya Kilkenny announced the draft targets last week, alongside Kingston Mayor Jenna Davey-Burns. Final targets will be released by the end of the year. Inner and middle Melbourne’s growthThe targets aim for many council areas in inner and middle Melbourne to double their new dwelling approvals, contributing to the Housing Statement goal of 70% of new homes in established areas and 30% in outer-suburban growth areas. You may read the whole article here:https://bit.ly/3L2P55r
Tiimely Home Forecasts Loan Surge
The recent announcement by the Reserve Bank (RBA) to maintain interest rates at 4.35 % is expected to drive an increase in fixed rate and refinance home loans, according to online digital home lender Tiimely Home. Formerly known as Tic: Toc Home Loans, the company foresees a surge in customer activity in response to the stable rates. Belinda Jackson, Tiimely Home’s head of retail, noted a slowdown in the refinance market due to uncertainty over RBA’s decision. You may read the whole article here:https://bit.ly/4c6b3QV
How Will Stage 3 Tax Cuts Increase Borrowing Capacity?
With the stage 3 tax cuts soon to come into effect, Aussie Home Loans has revealed new research analysing its potential effect on borrowing capacity. Franchise brokerage Aussie Home Loans (Aussie) released new research yesterday (19 June) finding that the upcoming stage 3 tax cuts could increase a buyer’s borrowing capacity. The tax cuts are set to come into effect from 1 July and will reduce the 32.5 per cent tax bracket down to 30 per cent and increase the 37 per cent tax bracket threshold from $120,000 to $135,000. The lowest tax bracket rate will be reduced to 16 per cent for those earning $18,000–$45,000, while the 45 per cent threshold is also being increased to $190,000, up from $180,000. Aussie’s research found that single Australians with no dependents earning $120,000 a year can currently borrow a maximum of $615,135. Due to the tax cuts, this could increase in the financial year 2025 by $27,062 (or 4.4 per cent) on a mortgage based on a 6.28 per cent interest rate. You may read the whole article here:https://bit.ly/3KQbZwV
