Weekly News
- New South Wales Voters Show Near Half Support for Increased Apartment Construction, Governor Calls for Boost in Housing Supply.
- Sydney Property Market Witnesses Rapid Growth, Detached House Prices Soar 5.3% in June Quarter.
- Australian Inflation Plunges, End of Rate Hikes Announced? Rate Cut on the Horizon!
New South Wales Voters Show Near Half Support for Increased Apartment Construction, Governor Calls for Boost in Housing Supply.
New South Wales voters support the government’s plan to boost housing supply. Governor Chris Minns warns of a significant housing shortage, projecting a shortfall of 130,000 homes in the next five years. Compared to other states, New South Wales’ housing supply is insufficient, with only about 5 homes for every 1000 people, while Brisbane and Melbourne have 6 and 7 homes, respectively.
Minns emphasizes balanced growth, advocating for more apartments and high-rises in areas with job opportunities and good public transportation. The government plans to expedite infrastructure approvals in rapidly growing communities, building 18,000 homes in the next three years.
Projects exceeding $100 million, with 20% allocated to affordable housing, are considered state-significant under housing policy. The Planning Minister and Independent Planning Commission have authority over approving or rejecting such projects, bypassing local planning authorities.
Minns stresses the urgency to increase housing supply to meet surging demand. Sydney’s rental prices rose by 24% in the past year, highlighting the need for balance between supply and demand.
Sydney residents support the plan, recognizing the importance of addressing height and density approvals to tackle the housing challenge effectively.
Sydney Property Market Witnesses Rapid Growth, Detached House Prices Soar 5.3% in June Quarter.
Sydney’s property market is experiencing a significant surge, with detached house prices soaring by 5.3% in the June quarter, the highest increase since 2021. The strong demand has outpaced supply, driving this rapid growth. Despite a $60,000 decline in 2022, overall property prices in all capital cities have risen by $34,000 since December, a 3.4% increase.
Melbourne also saw its first quarterly rise in 18 months, with a 0.4% increase in detached house prices. Other cities like Brisbane, Hobart, Adelaide, and Perth also experienced upward trends, with price increases ranging from 0.9% to 2.8%.
Looking ahead, experts predict a 9% rise in Sydney’s detached house prices by June next year, with Melbourne expected to rise by 2% and Brisbane by 4%. However, the pace of price growth may moderate in the coming months due to the non-seasonal growth of newly listed properties.
Despite the current competitiveness in the market, experts remain cautious about the potential impact of rising interest rates on property listings during the spring season. The supply and demand dynamics are expected to readjust in response to changing economic conditions.
Sydney’s real estate market remains vibrant, and other capital cities are gradually recovering, presenting both challenges and opportunities for the property industry.
Australian Inflation Plunges, End of Rate Hikes Announced? Rate Cut on the Horizon!
The issue of the Australian central bank’s interest rate hikes has been under close scrutiny, but recent inflation data indicates that the rate increases may be coming to a halt. Starting from April 2022, Australia has experienced a continuous 12-time hike, raising interest rates from 0.1% to 4.1%. However, with inflation surging to its highest point in 32 years, reaching 7.8%, the economy is sending out complex signals. The upward trend in prices persisted during the first quarter of 2023, resulting in a 7% overall price increase for the year.
However, recent inflation data indicates that the inflation rate has peaked and is rapidly slowing down, with CPI inflation dropping to 6%. This further validates concerns that the central bank’s rate hikes may have been too aggressive. The complex signals in the economy have led to a decline in consumer and business confidence, and inflation expectations have not risen.
In this scenario, experts believe that the Australian central bank is likely to pause its rate hikes at the upcoming August monthly meeting. Unemployment rate forecasts also suggest a gradual increase from the current near 50-year low of 3.6% to 4.3%. Investor expectations of rate hikes by the Australian central bank have weakened, with only a 31% probability, significantly lower than the previous 50%. Economic growth forecasts are also less optimistic, with expert groups projecting only a 1.5% growth rate for 2023-24, far below the Treasury Department’s 2% prediction.
Consequently, many anticipate that the Australian central bank may maintain a pause on interest rates in the near future, and they might need to adjust rates again to ensure both inflation and economic stability. While inflation is currently declining, considering the strong labor market, inflation may still remain higher than expected in the coming months, which could influence the central bank’s decision on whether to resume rate hikes.
Given this backdrop, the Australian central bank faces a critical decision regarding whether to pause or continue rate hikes. For economic recovery and stability, the central bank needs to carefully consider various factors to make sound decisions. Presently, many observers believe that Australia’s rate hikes may be coming to an end, but future trends remain uncertain.
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