It has been an exciting past month in the property world, with the housing recovery continuing to gather momentum. In October, all capital cities except Melbourne saw dwelling values increase. If you are new in the property market, considering your next property purchase, or taking the next step in your investment journey, the timing couldn’t be better. Now is the time to organise your finance and take advantage of low interest rates! Here’s our latest market news and insights.
Interest rate news
The Reserve Bank of Australia (RBA) announced it has decided to cut the official cash rate to a new record low of 0.10 per cent at its meeting on the 3 November. The Board sees the combination of the RBA’s bond purchases and lower interest rates to assist the economic recovery further by: lowering financing costs for borrowers; contributing to a lower exchange rate than otherwise; and supporting asset prices and balance sheets.
In October, the RBA reiterated a commitment to maintain highly accommodative policy settings as long as required. RBA governor Philip Lowe highlighted the importance of the labour market as the Board continues to consider how additional monetary easing could support jobs and the overall economy. “In terms of unemployment, we want to see more than just ‘progress toward full employment,’” governor Lowe said in his speech. “We want to see a return to labour market conditions that are consistent with inflation being sustainably within the 2 to 3 per cent target range.”
The 2020/21 Federal Budget was delivered on the same day as the October cash rate announcement. The Budget highlighted the government’s economic measures to support Australian households and businesses on the path to recovery.
Home value movements
Great news for homeowners and investors – dwelling values increased in all capital cities except Melbourne in October. Housing values started to move into recovery mode recording a 0.4% rise, marking their first monthly increase since April. The biggest jump was seen across Darwin (1.21%), Adelaide (1.17%), Hobart (1.00%) and Canberra (1.01%), where values in each city increased at least 1%. Although Melbourne home values were lower in October, it showed promising signs as restrictions eased late in the month where new listings surged, clearance rates lifted and buyer activity is recovering.
Over the month, regional markets continued to outperform their city counterparts. According to CoreLogic head of research Tim Lawless, the past two months have reversed the previous mild falls across the combined regional areas where regional dwelling values are up 1.7% while values across the combined capitals index have fallen by 2.3% since March.
CoreLogic data shows that total advertised stock levels remain low despite the surge in new listing numbers in the past weeks, suggesting strong buyer demand. “Consumer confidence has consistently improved since the virus curve has once again flattened and Australians respond positively to measures announced in the federal budget,” Mr Lawless said. Also, auction results have been strong, not just in the two big auction capitals of Melbourne and Sydney but around Australia. Over the past two months, clearance rates have been reported steadily above 60%.
Properties are being absorbed faster in the market which means that you need to move fast and come prepared, so it is important to have your finance pre-approved. If you’re ready to make the most of the record low interest rates, speak to us about your finance options. Also, mortgage brokers can help you with a suitable loan for other kinds of large purchases such as cars and other assets – not just home loans.
Whatever your finance needs, speak with us today!