July Newsletter

For the third month in a row, the Reserve Bank of Australia (RBA) increased the cash rate in July to 1.35 per cent.

Several lenders moved swiftly, passing on the latest RBA cash rate increase to borrowers.

Meanwhile, property prices in some markets continue to fall. Sydney and Melbourne home values have been trending lower for several months, and it’s likely this downwards momentum will spread to other capital cities and regional markets.

If you’re in the market to purchase a property or need advice about refinancing given all the interest rate movement, we’re here to help.

Interest rate news

At its July meeting, the RBA lifted the cash rate by 50 basis points to 1.35 per cent to curb runaway inflation.

RBA Governor Philip Lowe recently warned Australians to be prepared for substantial interest rate rises over the rest of 2022, conceding he is not sure how high they might climb.

He said he expected inflation could reach 7 per cent by Christmas and it may not fall until the first quarter of next year. He also said the RBA would do what was necessary to get inflation back to between 2 to 3 per cent.

“I’m confident that inflation will come down over time, but we’ll have to have higher interest rates to get that outcome.”

If you’re concerned about rising interest rates, it’s important to seek advice. We may be able to find you a different home loan that better suits your financial situation or suggest tools to help you manage your repayments.

Home value movements

CoreLogic’s national Home Values Index was down -0.6% in June. This was driven by falls in Sydney (-1.6%) and Melbourne (-1.1%). Hobart saw property prices fall -0.2% in June.

Adelaide had the highest monthly growth rate, at 1.3%, while Darwin saw property prices increase 0.9% and prices rose by 0.3% in Canberra.

In Perth, prices grew 0.4% and in Brisbane, growth in values flattened out to 0.1%.

“Housing value growth has been easing since moving through a peak in March last year, when early drivers of the slowdown included rising fixed term mortgage rates, an expiry of fiscal support, a trend towards lower consumer sentiment, affordability challenges and tighter credit conditions,” CoreLogic’s Research Director Tim Lawless said.

“More recently, surging inflation and a rapidly rising cash rate have added further momentum to the downwards trend. Since the initial cash rate hike on May 5, most housing markets around the country have seen a sharper reduction in the rate of growth.

“Considering inflation is likely to remain stubbornly high for some time, and interest rates are expected to rise substantially in response, it’s likely the rate of decline in housing values will continue to gather steam and become more widespread.”

In the week ending July 3, auction activity continued to fall across the combined capital cities.

All dwellingsAuctionsClearance RatePrivate SaleMonthly home
values change
VIC29467%946▼ – 1.1%
NSW28177%1373▼ – 1.6%
ACT3964%61▲ 0.3%
QLD10049%1121▲ 0.1%
WA2– %651▲ 0.4%
NT2– %33▲ 0.9%
TAS0– %145▼ – 0.2%
SA5074%314▲ 1.3%

* Monthly Home Values figures as of 30 June 2022
* Australian auction results, clearance rates and recent sales for the week ending 3 July 2022
* The clearance rate is preliminary and current as of 8:00 am AEST, 4 June 2022

If you’re gearing up for a Spring property purchase, get in touch now to arrange pre-approval on your finance.

It’s important to get the ball rolling early, so that you’re ready to jump in when you find the right property in the right location.

Additional sources
CoreLogic RP Data Daily Home Value Index: Monthly Values

Get our insights as soon as they’re published.

Subscribe to our Newsletter