Autumn has arrived and as the weather cools, property markets around the country are starting to heat up. Auction numbers and clearance rates are a bit low for this time of year, but private home sales are going along quite strongly. Nevertheless, home values are continuing to fall in many areas, and if you’re in the market to buy a home at a bargain price, there are plenty of houses and units up for sale.
Interest Rate News
The Reserve Bank of Australia (RBA) decided to keep the official cash rate at 1.5% during its March meeting. Concern about the impact of the declining housing market on our economy has led to speculation by analysts about the RBA cutting rates by up to 50 basis points (or half a percent) by mid-2020. But right now, it’s a wait and see game and according to the RBA, rates could go either way.
Home value movements
According to Economist, Cameron Kusher at CoreLogic, “…it is looking inevitable that dwelling values will fall further over the coming months.” This is great news for home buyers and property investors who have been waiting for a more favourable time to get on the property ladder.
Some areas are holding value better than others and it pays to do your research before putting down a deposit. The biggest declines in home values over the last month have been in Darwin where prices fell 1.67% and in Perth where they fell 1.46%. As expected, ‘market corrections’ in Melbourne also brought values down by 1% and in Sydney, 0.97%.
Changes to home values were less dramatic in other areas, with regional centres holding value quite well. Brisbane/Gold Coast home values declined just 0.25%, and Canberra 0.19%. However, home values were up in Adelaide by 0.04% and in Hobart by 0.82%.
Property market activity
When property prices are stagnant or falling, conditions tend to favour buyers and vendors are more likely to choose a private sale over an auction to achieve their price. As a result, the number of auctions and clearance rate figures are decreasing as private sales numbers rise. The table below provides a snapshot of the property market at the end of February.
If you’re in the market to buy a home or invest in property, be sure to read our articles this month about how to take advantage of our current buyer’s market and avoid any risks. If you are wanting to buy a home, a home loan pre-approval is very important in this market, so please call us to chat about your plans today.