We hope you are embracing the arrival of winter and enjoying the cool change. In recent weeks we’ve seen conditions for property buyers improving, with fewer homes reaching the reserve price at auction and values trending downwards in many markets. During the colder months, there are usually fewer buyers doing the rounds, so there could be some red-hot deals for you to snap up. If you’re thinking about purchasing a new home or investment property this winter, please give us a call on 0437 498 800.
Interest Rate News
As expected, the Reserve Bank of Australia kept the cash rate on hold at 1.5% again this month. There is some speculation that rates could start to rise toward the end of the year, provided the RBAs measures to improve inflation, employment and wages growth start to take effect.
Some local analysts are anticipating that lenders will soon start to raise rates outside of RBA movements, due to the rising costs of borrowing. Interbank lending rates (the rates that apply to Australian banks when lending money to each other) are on the rise in line with global money markets and are likely to affect home loan interest rates across the board at some point this year.
There is some good news, however. The Australian Prudential Regulation Authority (APRA) has lifted the 10% limit on property investment credit growth for eligible banks from July 1. This has resulted in some lenders cutting rates on interest only loans already, so if you’re in the market for a property investment loan please call.
Property Market News
Auction Clearance Rates
Whilst our property markets had a healthy number of properties up for auction throughout May, clearance rates declined considerably and there was a general softening in home values.
For the week ending Sunday 03 June, (officially the final weekend in the busy autumn selling season):
- Victoria held the highest number of auctions at 1161, achieving a clearance rate of 62%
- NSW was next with 1001 scheduled auctions and a clearance rate of just 52%
- QLD held 273 auctions with a clearance rate of just 43%
- ACT held 107 auctions and cleared 66%
- SA held 105 auctions and cleared 68%
- WA only scheduled 29 auctions and achieved a clearance rate of about 25%
- NT 11 auctions with a clearance rate of about 50% and
- Tasmania only scheduled three auctions with no sales recorded
Home Values
According to CoreLogic, home values were softening in our larger property markets during the month ending May 31. Sydney home values fell by 0.22% during the month and were showing a decline of 4.21% since this time last year. Melbourne’s home values fell by 0.50% but were still up by 2.22% from this time last year. Canberra’s home values fell by 0.10% last month but were up by 2.28% year on year.
Home values also fell in Darwin by 0.22% in May and are down by 7.88% from this time last year. They also fell in Perth by 0.14% in May and were down by 1.84% since this time last year. Adelaide and Hobart are the only markets showing increases – Adelaide’s home values were up by 0.50% in May and by 0.62% since this time last year and Hobart is still proving to the outstanding performer, with home values up by 0.81% in May and by 12.71% since this time last year.
Winter is generally a quiet season, so we can expect to see a further slowing in auction numbers, clearance rates and home value rises in the next few weeks. This may provide a chance to pick up a bargain for those willing to brave the cold weather. If you need pre-approval on a loan as a first home buyer, next home buyer, or property investor, please get in touch today!
Sources:
http://www.corelogic.com.au/research/monthly-indices.html
https://www.realestate.com.au/auction-results/
