Homeowners breathed a collective sigh of relief this month when the Reserve Bank of Australia (RBA) kept the cash rate on hold, following the release of softer inflation figures.
Meanwhile, it’s been a slower than usual start to the autumn property season, with many buyers and sellers still adopting a “wait and see” attitude.
Seasonal new listings have been down compared to previous years, as sellers hesitate given the current climate.
CoreLogic recently revealed house prices across the nation had plummeted 7.9 per cent over the year to February – the largest 12-month decline on record. For prospective buyers who are in a position to snap up a bargain, there are certainly opportunities to be found.
At its April meeting, the RBA kept the cash rate on hold at 3.60 per cent. It follows 10 consecutive cash rate increases by the RBA, starting in May 2022.
Following the release of the latest inflation figures from the Australian Bureau of Statistics (ABS), there were hopes that a cash rate pause could be on the horizon.
The ABS’s monthly consumer price index showed annual inflation of 6.8 per cent over the year to February – down from 7.4 per cent in January and a peak of 8.4 per cent in December.
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In March, we saw house prices rise nationally for the first time in 11 months, according to CoreLogic. Home values were up 0.6% in the month of March.
The growth was led by Sydney and Melbourne, which experienced increases of 1.4% and 0.6% respectively.
Meanwhile, some of the smaller markets, such as Darwin and Hobart, are still seeing properties prices fall.
We are seeing divergence in some cities as well, with certain suburbs faring better than others.
In some areas of Sydney, for example, the shortage of housing stock caused by vendors’ reluctance to sell has increased competition for properties and pressured buyers to pay more. As a result, record prices were being fetched for properties in at least 20 suburbs in February and March.
CoreLogic’s research director, Tim Lawless, said several factors were helping to drive up property prices, including below-average stock levels.
“Although interest rates are high and there is an expectation the economy will slow through the year, it’s clear other factors are now placing upwards pressure on home prices,” Mr Lawless said.
“Advertised supply has been below average since September last year, with capital city listing numbers ending March almost -20% below the previous five-year average.
“Purchasing activity has also fallen but not as much as available supply; capital city sales activity was estimated to be roughly -7% below the previous five-year average through the March quarter.”
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