Unsurprisingly, the official cash rate was left on hold at 3% for the second consecutive month after the Reserve Bank’s (RBA) March meeting. The decision was made on the back of the release of new data that suggests the effects from 175 basis points worth of rate cuts over the past 16 months are finally filtering through to the broader economy.
The most recent Real Estate Institute of Australia (REIA) Housing Affordability Report shows that Australian property is now at its most affordable level in more than three years, due to rising incomes and falling interest rates.
According to the latest RP Data/Rismark Hedonic Home Value Index, capital city property prices rose by 0.3% in February after experiencing 1.2% growth in January. Results by city were mixed, though, with half recording a lift in values and half recording a drop. The overall monthly increase was largely driven by a strong result in Melbourne, where dwelling values rose by 1.5%. Over the past three months, Melbourne was again one of the top performers, recording growth of 2.2%.
New home sales increased again in January for the fourth consecutive month, according to the Housing Industry Association’s (HIA) latest report. Australian homes sales rose 4.2% following a 6.2% lift in December. Over the January quarter, detached home sales rose by 10.8% in January. Despite the recorded increases, total sales volumes are still 6.4% lower than the same period last year.
Meanwhile, data from SQM Research showed the number of Melbourne properties available for sale rose by 7% over February, partly due to expected seasonal shifts. Currently, the number of properties on the market is 5.3% higher than the equivalent period last year. Regardless, the balance between supply and demand appears to have remained fairly even – throughout February, Melbourne’s general market auction clearance rates hovered around 65%, equivalent to the peak levels of 2010.
Critically, while buyers still appear to be heavily focussed on value, they are less hesitant to act and more optimistic, offering good opportunities for vendors who are motivated to sell and can remain realistic with their price expectations.
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