The official cash rate was left on hold at the record low of 1.5% for the thirteenth month in a row, after the Reserve Bank’s meeting in early September. The central bank has now said it’s not in the public’s best interest for the cash rate to be cut further, ramping up its warnings over household debt.
While a move upwards is now most likely, the majority of experts continue to predict there will not be any increase in interest rates this year. Finder.com.au reported 60% of surveyed economists expect the Australian dollar to fall, increasing hopes for stronger economic growth over time.
The contrasting speculation is failing to dampen the overall enthusiasm for Melbourne property with CoreLogic reporting prices rose by a further 0.5% over August, taking annual growth to 12.7%.
Interestingly, a Domain article reported the number of million dollar suburbs across Melbourne has risen from five in 2006 to 86 today. Half of those are new entrants to the list, having hit the million dollar point only in the past two years. Even adjusting for inflation, 49 of those suburbs would have made list compared to the 2006 threshold, illustrating the rapid growth in values over recent years. The geographic spread has been steady – around 2009 the million dollar region began extending to incorporate Bentleigh and Carnegie, then by 2015, spread to Bentleigh East. For many long-term owners in these suburbs, an updated valuation of their home has provided a welcome surprise.
On an auction front, after a strong August, the traditionally busy spring season kicked off with a surprising fall in the number of auction properties for sale over the first weekend of September, resulting in a strong 74.8% clearance rate. Listing numbers are expected to continue rising as the season progresses, particularly after the October long weekend.
While lending restrictions have reduced the number of active buyers in the market, a pent-up demand is ensuring positive sale outcomes, particularly where vendor price expectations are realistic and in-line with current market values.