RBA To Hold The Line In June Decision
Another cash rate hold is expected ahead of the central bank’s June monetary policy meeting. Major bank economists have predicted the Reserve Bank of Australia (RBA) to leave the official cash rate on hold at 4.35 per cent during its upcoming June monetary policy decision. The board is expected to retain the same stance on the potential movement of interest rates much like what was heard from RBA governor Michele Bullock following the May monetary policy meeting. Commenting on the upcoming decision, Westpac senior economist Matthew Hassan said recent data will “provide some comfort” that restrictive policy is bringing inflation back to target; however, he noted the “path is still uncertain”. You may read the whole article here:https://bit.ly/45sjqE4
Rates Likely To Remain On Hold For The Entire Year – Capspace
Interest rates are expected to remain unchanged for the rest of the year, with a slight possibility of a rate increase if inflation stays above the central bank’s 2% to 3% target range, according to non-bank lender Capspace. Tim Keith managing director of Capspace, said this outlook was influenced by a tight labour market, which continues to drive up wages and services inflation. The Australian Bureau of Statistics (ABS) has reported that the seasonally adjusted unemployment rate dropped by 0.1 percentage point to 4% in May. Employment rose by nearly 40,000 people, and the number of unemployed fell by 9,000, leading to the lower unemployment rate. “The tight labour market will keep up with pressure on wages costs and services inflation, which, along with the rising cost of rent and housing, will keep inflation elevated, which is likely to see the Reserve Bank of Australia (RBA) keep rates on hold at its June meeting and for the remainder of this year,” Keith said. You may read the whole article here:https://bit.ly/3Xiuamv
Residential Dwelling Values Surge to $10.7 Trillion
The total value of residential dwellings in Australia reached $10.7 trillion in the March quarter of 2024, a $209.4 billion increase from $10.5 billion in the December quarter of 2023, according to preliminary estimates of the Australian Bureau of Statistics (ABS). Households owned $10.3 trillion of the total value of residential dwellings, with the total value of residential dwellings increasing across all states and territories in the March quarter of 2024. The latest ABS Total Value of Dwellings data also showed the number of residential dwellings in Australia rose by 52,700 to 11.2 million, and the mean price of residential dwellings increased by $14,300 to $959,300 this quarter. You may read the whole article here:https://bit.ly/4b4bhqu
Supply Constraints Boost Mid-Sized Capitals
CoreLogic’s latest Housing Chart Pack highlighted the disparity in housing inventory relative to historical averages.Eliza Owen, CoreLogic’s head of research Australia, identified supply and demand balance as a key driver of market variations. “At one end of the spectrum is Perth, with total listings sitting -45% below average stock levels, and a monthly capital growth rate of 1.8%,” Owen said. “At the other end of the spectrum is Hobart, where there are 39.5% more listings than the historic five-year average for this time of year, and home values are 0.5% lower.” This imbalance suggests that markets like Perth are seeing heightened competition for homes, driving prices up, while Hobart’s market faces downward pressure due to excess inventory. You may read the whole article here:https://bit.ly/3yYRLym
Home Prices Hit Record Highs Across Major Cities
Home prices in Sydney, Brisbane, Adelaide, and Perth have soared to new records, according to PropTrack’s weekly economic update. May witnessed significant increases, with Perth leading the growth at almost 1% for the month, marking a 21% rise from May 2023. Brisbane and Adelaide also showed strong performance, with annual increases around 14%. Despite an increase in new listings across major cities, robust demand has swiftly absorbed the additional supply, propelling further price growth. You may read the whole article here:https://bit.ly/3RhddEX
Suburbtrends Proposes “Retirement” to Tackle Rental Crisis
As the rental market pressures intensify across Australia, Suburbtrends has unveiled a pioneering solution dubbed “rentirement.” This strategy encourages Australians aged 67 to 77 to release their homes into the rental market while they travel or retire overseas, potentially unlocking a significant number of properties to alleviate housing shortages. Potential impact on the rental market. Suburbtrends’ founder, Kent Lardner, highlighted the potential of this initiative. “Our data shows that over 137,000 homes could be released into the rental market if just 10% of the Rentirees cohort participated,” Lardner said. “This represents a substantial untapped resource that could drastically ease rental pressures.” You may read the whole article here:https://bit.ly/3yRuRsK
Strategies for Population Surge
The national rental vacancy rate increased by 0.08 percentage points to 1.3% in May, marking the highest rate since July 2023 and the first instance of three successive monthly improvements since late 2020. The latest PropTrack Market Insight Report showed improved rental vacancy rates in many areas, with Sydney recording a 0.16 percentage point increase in vacancy rates and the ACT experiencing a 0.18 percentage point rise last month. Perth recorded the largest increase over the past three months with a 0.40-percentage-point jump. Despite these increases, PropTrack noted that rental availability remains low across all markets, with only the ACT seeing a higher share of available rentals than before the pandemic. You may read the whole article here:https://bit.ly/3VaH0AC
Surge in Loan Approvals Driven by FHBs
New loan approvals are up almost 10 per cent since autumn 2023, signalling a revival of young buyer confidence. Data from the Australia Bureau of Statistics (ABS) has revealed that new loan commitments have seen a 9.9 per cent increase since March 2023. Surprisingly, given the extreme cost-of-living stress that many Australians are facing, young buyers may be experiencing a restoration of market optimism. Dan O’Loughlin, managing director of Barry Plant Pakenham, Drouin, and Berwick, said: “Confidence is definitely back in the market, particularly among first-time home buyers who are feeling more secure about their finances.” You may read the whole article here:https://bit.ly/3Riffor
NAB: International Investors Outpace Locals in New Vic Home Buys Early 2024
More foreign investors purchased a property in a new Victorian estate or development than local investors did in the first three months of 2024. And with a report from the nation’s third biggest bank also showing the share of first-home buyers tackling new builds across the state is the lowest in the country at 22 per cent, there are signs pressure is rising on the city’s most affordably-priced homes going under the hammer. The first NAB Residential Property Survey for 2024 found just 8.6 per cent of new home sales in the first three months of the year had been to investors, while 10 per cent had been to internationals. You may read the whole article here:https://bit.ly/4bJsiHz
How Have Rates Changed?
Canstar has revealed the home loan rate movements over the past week. Two lenders – Resi and Yellow Brick Road – increased owner-occupier and investor variable rates by an average of 0.1%. Conversely, BCU Bank cut one owner-occupier and investor variable rate by an average of 0.06%, while The Capricornian reduced one owner-occupier and investor fixed rate by an average of 0.3%. The average variable interest rate for owner-occupiers paying principal and interest stands at 6.87%, with the lowest variable rate for any LVR being 5.74%, offered by Regional Australia Bank. There are 26 rates below 5.75% on Canstar’s database, consistent with the prior week. You may read the whole article here:https://bit.ly/455eapT
