Welcome to our September Newsletter
The latest cash rate cut has only added fuel to the market. In August, Australia’s median property price rose by 0.7% – the strongest monthly growth since May last year. With more interest rate cuts expected, this year’s spring selling season is shaping up to be one of opportunity for both buyers and sellers.
If you’re thinking about buying, now’s the time to get your finance pre-approved so you can move with confidence when the right property comes up.
The monthly Consumer Price Index indicator rose 2.8% in the 12 months to July, a larger-than-expected increase from the 1.9% rise in June.
The Reserve Bank of Australia (RBA) responded by cutting the cash rate in August to 3.6 per cent in a unanimous decision by the Board, while also flagging the potential for two or three more rate cuts to come.
All four major banks passed on the cash rate cut to customers by the end of August, providing mortgage relief to millions of borrowers. For example, those with a $500,000 home loan, that equates to roughly $74 in savings a month.
RBA governor Michele Bullock said the RBA was increasingly confident that unemployment would not rise and inflation would stay near the target level.
“That’s our best guess, and we’re looking to see that we continue on that path and, as we do, we can continue to lower interest rates,” she said.
What does this mean for you? Even a small reduction in your interest rate can help you reduce costs over the life of your loan. It’s a good time to book a home loan health check and see how your current loan compares.
The next RBA cash rate decision will be announced on 30 September.
National property values rose by 0.7% in August, taking the median home value to $848,858.
Brisbane led with a 1.2% jump, followed by Perth (1.1%) and Darwin (1%). Adelaide (0.9%) and Sydney (0.8%) also saw solid growth, while Melbourne (0.3%) and Canberra (0.4%) crept higher. Hobart was the only capital to record a decline, down 0.2%.
Cotality head of research Eliza Owen said the drivers of rising home values were straightforward.
“You’ve got more demand in the housing market, with real wages growth up to its highest level in five years, lower interest rates and more consumer confidence aiding housing purchases,” Ms Owen said.
“You’ve got about 120,000 properties on the market for sale right now, whereas usually this time of year, the five-year average would be 150,000. “So rising demand against tight supply is continuing to see a rise in home values.”
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 1121 | 68% | 1594 | ▲ 0.3% |
| NSW | 1025 | 62% | 1908 | ▲ 0.8% |
| ACT | 74 | 70% | 118 | ▲ 0.5% |
| QLD | 240 | 59% | 1187 | ▲ 1.2% |
| WA | 11 | 73% | 614 | ▲ 1.1% |
| NT | 3 | 67% | 46 | ▲ 1.0% |
| TAS | 1 | 100% | 179 | ▼ ‑ 0.2% |
| SA | 120 | 74% | 337 | ▲ 0.9% |
With fewer listings than normal for this time of year and strong competition among buyers for properties, this spring is shaping up to be a seller’s market.
That makes it crucial to have your finance sorted before you start making offers.
Pre-approval gives you the confidence to act and shows sellers you’re serious. If you’d like to be ready to move when the right property appears, get in touch today and we’ll help you line up the right finance.
