Welcome to our November newsletter
Capital city home values have fallen 8.1% over seven months, according to Cotality, while listings have reached their highest level for this time of year since 2019. Properties are taking longer to sell, and vendors are reducing their asking prices to secure a sale.
For buyers who have their finances in order, these conditions may present opportunities. Experts say first-home buyers and those looking to upsize could find better value in the current market.
But a lower purchase price is only part of the picture. Interest rate hikes, cost-of-living pressures, rising inflation and Budget tax changes continue to weigh on buyer sentiment.
While experts say the fundamentals supporting housing demand remain strong, buyers still need to weigh up the risks, their budget and the merits of each property.
Looking to buy a home or investment property before Christmas? Talk to us about your borrowing capacity and getting your finance pre-approved before you make an offer.
The Reserve Bank of Australia (RBA) increased the cash rate another 0.25 percentage points to 4.85% at its Melbourne Cup meeting, pushing the cash rate to its highest level since the Global Financial Crisis.
The Reserve Bank of Australia (RBA) delivered another rate rise at its Melbourne Cup Day meeting, lifting the cash rate by 0.25 percentage points to 4.85%. It was the fifth increase this year, taking the cash rate to its highest level since 2008.
Inflation remains the sticking point. Annual headline inflation rose 4.3% in September, up from 4.0% in August, while underlying inflation was 3.6%.
For borrowers, those rate rises add up. For a typical homeowner with a $731,000 loan, their monthly repayments are about $578 higher than they were at the start of the year.
The next cash rate decision will be announced on December 8, but you don’t need to wait for the next announcement to review your home loan.
If you’re struggling to meet your repayments, help is available. Get in touch and we can discuss your circumstances with your lender, or look for a more competitive home loan with another bank.
Property prices fell for a seventh consecutive month, with many buyers spooked by more than just Halloween in October.
Prices were down 1.2% over the month, and Cotality’s national Home Value Index is now 6.7% below its March peak, equivalent to a decline of about $63,400 in the value of the median Australian dwelling.
Brisbane and Perth have overtaken Sydney with the fastest rate of decline, with dwelling values down 2% and 1.7% respectively in October.
Sydney came in third, with values down 1.6% over the month.
“The mid-sized capitals, where home values recorded extreme growth conditions over the past six years, are now well and truly in a correction,” Cotality research director Tim Lawless said.
“Virtually every suburb across Brisbane, Perth and Adelaide has recorded a drop in values over the past three months.”
Meanwhile, auction clearance rates across the combined capitals are consistently tracking below 50%, while private treaty sales have also weakened.
The median time on market, at 39 days, is the highest since August 2020, while vendor discounting, at 4.7%, is the largest since May 2019.
“Buyers have a lot more stock to choose from, they have more leverage and there isn’t the same urgency to buy as there was a year ago when home values were rising rapidly,” Mr Lawless said.
“But despite this being a buyer’s market, they are noticeably absent, reflecting low confidence and ongoing serviceability barriers.”
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 517 | 56% | 842 | ▼ – 0.8% |
| NSW | 896 | 38% | 1242 | ▼ – 1.6% |
| ACT | 65 | 54% | 105 | ▼ – 0.6% |
| QLD | 245 | 20% | 647 | ▼ – 2.0% |
| WA | 18 | 21% | 344 | ▼ – 1.7% |
| NT | 4 | 75% | 10 | ▲ 0.6% |
| TAS | 0 | — | 113 | ▲ 0.5% |
| SA | 133 | 34% | 165 | ▼ – 1.2% |
A lower asking price might catch your eye, but the repayments need to work for you too.
Whether you’re buying your first home, moving somewhere bigger or looking for an investment property, we can help you work out how much you could borrow, what the repayments might look like and which home loans could suit your purchase.
Get in touch before you make an offer, and let’s work through the numbers together.
