Home Prices Set to Surge Over Next Five Years
There will be a substantial increase in home prices in Australia by 2029 if current growth rates persist, new analysis of PropTrack data has revealed. If property prices continue their current trajectory, homes in traditionally affordable areas on the outskirts of major cities will likely reach million-dollar valuations, according to the property data insights provider. Paul Ryan, senior economist at PropTrack, clarified that the modelling is not a forecast but illustrates the extraordinary price growth over the past five years and its potential future implications. You may read the whole article here:https://bit.ly/4eQh31Z
Another Rate Rise Impact Housing Market
An increase to the cash rate could slow demand in a housing market that’s already showing signs of cooling. Should all things fall into place to force the Reserve Bank of Australia’s (RBA) hand to increase the official cash rate in August, prospective buyers would see their dreams of home ownership slip further out of reach, CoreLogic’s head of research Eliza Owen has said. A further 25-bp rise in August (taking the cash rate to 4.6 per cent) would take monthly repayments on the current median dwelling value to over $4,000 per month. You may read the whole article here:https://bit.ly/3zpYWjw
RBA Hints At Possible Rate Hikes
Mortgage holders should brace for potential interest rate increases, as minutes from the latest Reserve Bank of Australia (RBA) meeting reveal the board’s readiness to act if inflation surges. The June 17-18 meeting highlighted the ongoing challenge of controlling inflation, with RBA governor Michele Bullock and the board acknowledging that if inflation expectations were to rise materially from current levels, it could require significantly higher interest rates to bring inflation back to target. Days after the monetary policy meeting, inflation actually rose, with the Australian Bureau of Statistics (ABS) reporting that the monthly consumer price index rose to 4% in the year to May, up from 3.6% in April. You may read the whole article here:https://bit.ly/45TZxpB
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
