Welcome to our March Newsletter
This time of year can present unique opportunities. There is often less competition compared to the busy spring market, and some sellers may be more motivated to secure a sale before winter, which may create more favourable conditions to negotiate.
As interest rates and property market conditions continue to evolve, staying informed is key. In this update, we take a closer look at the latest interest rate changes and what’s happening across the property market, so you can better understand the trends shaping today’s lending environment.
If you’re looking to purchase or considering refinancing, get in touch and we’ll compare the market for you.
The Reserve Bank of Australia (RBA) increased the cash rate to 4.10% at its latest meeting, following a rise in February.
The move reflects ongoing concerns that inflation may remain above the target range for longer than expected. While the Consumer Price Index (CPI) held at 3.8% in the 12 months to January, more recent data suggest price pressures have picked up again.
RBA governor Michele Bullock said the decision was largely driven by stronger-than-expected demand in the economy, supported by a resilient labour market and solid economic growth.
“The data suggests there is slightly more excess demand in the economy than we thought in February, and inflationary pressures are therefore somewhat greater,” she said.
While rising fuel costs linked to conflict in the Middle East are expected to contribute to inflation, they were not the primary reason for the rate increase.
The RBA has indicated it will continue to monitor economic conditions closely and adjust policy if needed.
With interest rates shifting, it may be worth to review your home loan and consider whether your current rate remains competitive. If you’re curious about your options, give us a call – we may be able to find a more competitive rate or renegotiate your home loan with your current provider.
The next cash rate decision will be announced on 5 May.
February’s interest rate hike did little to dampen property prices in many Australian markets, with national dwelling values increasing 0.8% in February. Across the country, we’re seeing property values diverge.
Perth continues to show strong growth, with prices up 2.3% in February, adding $22,500 to the median property value over the month. Stock in the Western Australian capital is nearly 50% below the five-year average.
Brisbane, Adelaide and Hobart also posted solid gains throughout the month, each recording a rise of more than 1%.
Sydney and Melbourne’s prices were flat in February, compounded by increasing interest rates and weaker sentiment. Sydney’s prices were down -0.1% over the rolling quarter, while Melbourne’s were down -0.4%.
Cotality research director Tim Lawless said that while Sydney and Melbourne had traditionally led Australia’s housing cycles, there had also been periods where the market had moved in a counter cyclical way.
“The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track, but for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values,” he said.
“Vendors are looking more motivated in Sydney and Melbourne, possibly looking to beat a further softening in selling conditions as clearance rates ease and demand slows. If the typical seasonal pattern holds, the flow of new listings is likely to strengthen leading into Easter.”
Regional markets are outperforming the capitals across New South Wales, Victoria, South Australia and Tasmania. Regional demand has remained resilient due to lower price points and internal migration.
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 1131 | 59% | 1355 | — |
| NSW | 1223 | 53% | 1850 | — |
| ACT | 129 | 58% | 100 | ▲ 0.8% |
| QLD | 244 | 58% | 1093 | ▲ 1.6% |
| WA | 13 | 54% | 537 | ▲ 2.3% |
| NT | 2 | 100% | 21 | ▲ 0.2% |
| TAS | 0 | — | 174 | ▲ 1.2% |
| SA | 155 | 77% | 252 | ▲ 1.3% |
If you’re planning an autumn property purchase, chat to us about your finance options. We can organise pre-approval on your finance, so that you’re prepared and financially ready to dive in.
