Figures continue to defy headlines when it comes to Australia’s real estate market with national home values increasing 0.5% in August, representing the 19th consecutive month of house price increases nationally.
Overall, Australian capital dwelling prices are now 7.2% higher than they were 12 months ago and it’s likely property prices and rents are going to keep increasing throughout 2024, according to expert predictions.
In a similar demonstration of demand being deflected towards lower price points, the quarterly change in unit values was higher than houses in five of the eight capital cities.
CoreLogic figures indicate the current property cycle has been driven by an undersupply of good properties relative to current demand, resulting in increased property values and rents.
Monthly house gains were led by a 2.0% increase in Perth, followed by strong rises of 1.4% in Adelaide and 1.1% in Brisbane. Monthly growth in Sydney was a mild 0.3%, while four capital cities saw a monthly decline in home values, led by a -0.4% dip in Canberra, -0.2% in Melbourne and Darwin, and a -0.1% fall in Hobart.
The seasonally adjusted Home Value Index had a stronger result through the three months to August, at 1.7%.
Most capital cities reported higher unit prices over August with the exception of Melbourne down 0.1% compared to the July quarter, Canberra falling 0.3% and Darwin down 1.3%.
Hobart was the top monthly performer up by 4.4% followed by Perth higher by 1.5%, Adelaide up 1.4% and Sydney and Brisbane each higher by 0.4%.
The undersupply of properties is set to persist, with all commentators indicating that supply is going to far outweigh demand for some time yet.
Auction Clearances Increase into Spring
Auction markets moved through a 4th consecutive week where more than 2,000 homes went under the hammer, with a preliminary auction clearance rate of 71.7%, up from 70.2% the week prior (revised down to 64.4% on finalised numbers).
The preliminary clearance rate has held up amid the rise in auction volume and despite a broader rise in advertised stock levels and evidence of some momentum leaving the growth trend.
Auction sellers are expected to attain more positive results over the coming weekends, with the spring selling season officially underway and solid confidence on the rise.
Rate Cut Predictions
On the 6th of August the RBA left the official cash rate unchanged. The current official cash rate as determined by the Reserve Bank of Australia (RBA) is 4.35%.
The next RBA Board meeting and Official Cash Rate announcement will be on the 24th September 2024 and while it is expected to remain unchanged, the big four banks are forecasting reductions as soon as November.
While predicting the RBA’s rate decisions have proved difficult, Economists for the big four banks have all cast their predictions for the next series of cash rate movements.
- CBA expect 5 x 0.25% rate cuts starting in November 2024
- Westpac is forecasting 4 x 0.25% rate cuts starting in February 2025
- ANZ expects 3 x 0.25% rate cuts starting in February 2025
- NAB forecasts 5 x 0.25% rate cuts starting in May 2025
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If you’re looking to buy or sell, there’s an agent in your area ready to advise you on current market and seasonal trends specific to your region.
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