November is an exciting month as the Spring Racing Carnival kicks into high-gear and we begin the countdown to Christmas. It’s an exciting time for property buyers too, as auction clearance rates continue to slide, and sellers struggle to get their price in the spring property market.
Interest Rate News
At its November Melbourne Cup Day meeting, the RBA kept the official cash rate on hold, yet again, at 1.5%. Forecasters are anticipating the next RBA rate move will be downwards, considering declining property prices, and now expect no rate rises until late 2020.
During October, home loan interest rates remained steady on variable rate and interest only home loans. However, many banks lowered rates on fixed rate home loans, so talk to us if you’ve been considering a switch.
Property Market News
Despite a lot of gloom and doom in the media – particularly in WA – home values hung on tenaciously during October. Value adjustments were marginal across all capital city markets – in Perth they fell by just 0.8%, Melbourne 0.73%, Sydney 0.74%, Canberra 0.02% and Darwin 0.04%. Adelaide experienced a home value gain of 0.18%, Brisbane/Gold Coast 0.01% and Hobart 0.85%.
Auction Clearance Rates
Auction numbers were quite healthy during October, but clearance rates went on the slide – good news for buyers, but not so good for those selling property. In the last week of October, Victoria held 1830 auctions but only achieved a clearance rate of 49%. NSW had 957 auctions but only cleared 45%. In the ACT there were 101 auctions with a clearance rate of 49%. QLD had 331 auctions but only cleared 24%. SA had 141 auctions with a clearance rate of 57%. WA held 43 auctions and achieved a clearance rate of 36%. In the NT, there were 16 auctions with a clearance rate of 7%. Tasmania only had one auction and the property sold.
Property Market Predictions
The good news for sellers and property investors is that CoreLogic has predicted all capital city home values to return to positive growth territory by mid next year. A recent report by QBE* supports that view and is predicting that 2019 will bring year-on-year (YOY) growth above inflation for house prices in all capital city property markets except Sydney, where they expect to see a marginal decline of 2% YOY. Whilst they are predicting a YOY decline in unit and apartment prices in Sydney, Melbourne and Brisbane during 2019, they are expecting unit and apartment values to remain steady in other markets.
This is particularly good news for the Perth and WA property markets, where both house and unit values have been slowly falling for some time. It may be an indication that market conditions in the west are about to turn, which could be a green light for savvy property investors looking to get in early on a recovery.
It’s a buyer’s market so don’t wait to see us for pre-approval on your home loan. When you know your ceiling price, you’ll be able to negotiate with confidence on a great price for your dream home. If you’re considering a switch to a fixed rate home loan, please get in touch for a chat today on 0437 498 800.
*The QBE Australian Housing Outlook Update 2018