The property market is up and running, gaining momentum after the summer holidays.
January is typically the quietest month for property sales, but activity across Australia was about 15% higher than January last year, and almost 40% higher than the previous five-year average.
Although property prices have continued to rise, albeit at a slower pace, there has been speculation that property prices could come down in 2023 in line with potential interest rate hikes.
If you’re thinking about a property purchase, it’s a good time to touch base with us about pre-approval, so that you’re ready to buy when the time is right.
Interest rate news
At its first meeting for the year, the Reserve Bank of Australia (RBA) decided to keep the cash rate on hold at the historically low level of 0.10 per cent.
RBA Governor Philip Lowe said inflation had picked up quicker than the RBA had expected but remained lower than in many other countries.
“The headline CPI inflation rate is 3.5 per cent and is being affected by higher petrol prices, higher prices for newly constructed homes and the disruptions to global supply chains,” he said.
“As the Board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. While inflation has picked up, it is too early to conclude that it is sustainably within the target band.”
Bottom line: now is the time to take advantage of the low interest rates.
Home value movements
National housing values rose by 1.1% in January, with five of the eight capital cities recording a modest increase in the monthly rate of growth.
CoreLogic’s Research Director Tim Lawless said housing stock was thinly traded during January and it would be important to monitor the trend as transactional activity picked up.
“As the volume of home sales moves out of seasonal lows, we should get a firmer reading on how 2022 is shaping up,” he said.
“The early indication is that housing markets are starting 2022 with a similar trend to what we saw through late last year. Values are still broadly rising, but nowhere near as fast as they were in early 2021.”
“A softening in growth conditions has been influenced by less government stimulus, worsening affordability, rising fixed term mortgage rates and, more recently, a slight tightening in credit conditions, and a surge in new listings through the final quarter of last year.”
Meanwhile, auction activity is continuing to ramp up across the combined capital cities.
Some of the smaller capitals are leading the way, with Brisbane, Adelaide and Canberra recording auction volumes more than double those of this time last year.
