Weekly News
- Australian Property Market Welcomes Busy Spring Season with Rising Prices Driving Increase in Housing Inventory.
- Inflation Rate Drops to 4.9%, RBA May Pause Rate Hikes in September.
- Australian property prices continue their upward trajectory for the sixth consecutive month, accelerating the recovery pace!
Australian Property Market Welcomes Busy Spring Season with Rising Prices Driving Increase in Housing Inventory.
The Australian real estate market is entering a busy spring season with rising property prices, attracting sellers in Sydney and Melbourne. This momentum is driven by various factors, including the pause in interest rate hikes and increased buyer demand. Traditionally, spring has been a peak season for property transactions, and this year’s market activity has been especially strong due to notable changes during the winter months.
According to Domain data, new property listings in Sydney rose by 11% month-on-month and 10.1% year-on-year in July. Similarly, Melbourne saw a 7.4% month-on-month increase and a 2.4% year-on-year rise in new listings. These increases provide relief in a tight supply real estate market.
Dr. Nicola Powell, Domain’s Director of Research and Economics, noted that sellers have become more active in response to the robust sales environment and rising buyer demand. The growing motivation to sell properties is influenced by the current market dynamics.
Median property prices in Sydney and Melbourne are also on the rise. In Sydney, the median price increased by 5.3% month-on-month and 0.1% year-on-year, reaching AUD 1,538,017. Meanwhile, Melbourne’s median price rose by 0.4% from the previous quarter, with a 4.4% year-on-year decrease to AUD 1,027,996.
Stable auction clearance rates further bolster confidence among sellers and buyers. Sydney and Melbourne’s auction clearance rates surged, with increases of 23.2 and 19.1 percentage points respectively, reaching 72.4% and 40.4%.
PropTrack data reveals that over 2,400 properties are set for auction in the first week of the Australian spring season, reflecting increased confidence among landlords due to rising property prices.
Inflation Rate Drops to 4.9%, RBA May Pause Rate Hikes in September.
According to reports, as the inflation rate for July dropped to 4.9%, the Reserve Bank of Australia (RBA) might consider pausing further interest rate hikes.
The latest monthly Consumer Price Index (CPI) data reveals that Australia’s overall inflation rate decreased from 5.4% in June to 4.9%.
Despite a decline in prices for gasoline, fruits, and vegetables over the past year, electricity and gas costs have increased, while rent continues to rise. Although the overall inflation rate remains higher than the RBA’s target range of 2% to 3%, the decrease to 4.9% could lead the RBA to decide on a pause in further interest rate hikes, maintaining the official rate at 4.1%. This would continue the trend after twelve consecutive rate hikes and represent the highest point in the past eleven years.
Philip Lowe, who is set to preside over the final board meeting next week, has implemented the strictest tightening of interest rate policy since 1989 during his tenure as the Reserve Bank of Australia (RBA) Governor.
Despite the weakening of the Australian dollar’s exchange rate, the price of oil has fallen by 7.6% this year due to fluctuations in oil prices, while the cost of fruits and vegetables has decreased by 5.4%.
Meanwhile, housing costs continue to rise, particularly with the influx of international students into Sydney and Melbourne, leading to a 7.6% increase in rents over the past year.
Additionally, electricity prices have risen by 15.7%, and natural gas prices have increased by 13.9%. Nonetheless, due to the decrease in overall inflation rate, the RBA may reconsider the timing of further interest rate hikes to ensure economic stability and inflation control.
Australian property prices continue their upward trajectory for the sixth consecutive month, accelerating the recovery pace!
The Australian real estate market is robustly entering a busy spring season as property prices continue to climb. Experts note that sellers in Sydney and Melbourne are entering the new spring market with increased confidence, driven by a convergence of factors. The combination of a pause in interest rate hikes and rising buyer demand has created a “perfect storm” in the real estate market. Spring has historically been a thriving period for property transactions, but this year’s market has been particularly noteworthy due to unusual and significant changes observed during the winter months.
Data from Domain reveals that in July, new property listings in Sydney increased by 11% compared to the previous month and grew by 10.1% year-on-year. In Melbourne, new listings rose by 7.4% on a monthly basis and 2.4% year-on-year. These increases provide relief to the tight and undersupplied property market. Dr. Nicola Powell, Director of Research and Economics at Domain, emphasizes that sellers have become more active over the past few months, which is unusual. Rising buyer demand and strong sales conditions have motivated sellers to participate actively in the market.
Median property prices in Sydney and Melbourne are also on the rise. According to the Domain Price Report, Sydney’s median property price increased by 5.3% on a monthly basis and 0.1% year-on-year, reaching AUD 1,538,017. Melbourne’s median property price rose by 0.4% since the previous quarter but experienced a 4.4% year-on-year decrease, reaching AUD 1,027,996. Domain’s buyer demand index indicates increasing demand for both housing and apartments in Sydney and Melbourne since the last interest rate hike by the Reserve Bank of Australia.
Steady auction clearance rates are instilling confidence in both sellers and buyers. Domain data shows significant increases in clearance rates for Sydney (72.4%, up by 23.2 percentage points) and Melbourne (40.4%, up by 19.1 percentage points). As the Australian property market enters the first week of spring, over 2,400 properties are set for auction, reflecting heightened seller confidence due to rising property values.
In the midst of this recovery, CoreLogic data highlights the sixth consecutive monthly increase in national dwelling values, rising by 0.8% in August. This translates to a total increase of 4.9% since February or an additional AUD 34,301 per property. While the August growth surpassed July’s 0.7%, it remained below the rates of 1.1% in June and 1.2% in May. The property data company PropTrack reports a similar trend with a modest 0.3% increase in property prices in August. Brisbane led the price surge with a 1.5% increase, followed by Sydney and Adelaide at 1.1% each.
With housing costs continuing to rise and rent increasing by 7.6% in the past year, the property market’s resilience is evident. Additionally, rising electricity and gas prices have surged by 15.7% and 13.9%, respectively. However, the decrease in overall inflation could lead the Reserve Bank of Australia to reassess the timing of further interest rate hikes to ensure economic stability and inflation control.
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