The autumn property season is upon us, and while the weather may be cooling down, the property market around the country is continuing to heat up! In the latest REA Insights Property Outlook report, 2021 is set for a big year as the positive momentum for price growth continues.
There is a substantial lift in new listings in March and they are likely to track higher over the coming months according to CoreLogic’s Research Director, Tim Lawless. “If buyer demand continues to lift, it’s likely overall advertised stock levels will remain low,” Mr Lawless added. So, if you’re in the market for a new home or property investment, be sure to speak to us about your plans as soon as you can!
Interest rate news
The Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 0.10% at its 2nd March meeting. This announcement was not a surprise, as the RBA has been clear in their message that they won’t be changing rates any time soon. The Board also decided to maintain the current policy settings, including the yield on the three-year Australian government bond, as well as the parameters of the Term Funding Facility (TFF), and the government bond purchase program. RBA Governor, Philip Lowe, said that the economic recovery is well underway, and has been stronger than was earlier expected. “There has been strong growth in employment and a welcome decline in the unemployment rate to 6.4%. Retail spending has been strong and most of the households and businesses that had deferred loan repayments have now recommenced repayments,” he added.
Home value movements
CoreLogic’s home value index saw prices rise by 2.1% across all capital cities and the rest of state regions, making it the largest month-on-month change CoreLogic has recorded since Aug 2003. Regional housing values continued its increasing trend as it went up by 2.1% over the month. The capital cities have caught up from their weaker performance as their housing values jumped by 2.0%. Hobart (2.50%), Sydney (2.47%), and Melbourne (2.06%) were among the strongest-performing markets where dwelling values increased by more than 2.0% in February. The dwelling values for the rest of the capital cities also increased: Canberra (1.87%), Perth (1.55%), Brisbane (1.47%), Adelaide (0.75%) and Darwin (0.74%).
CoreLogic data shows that one of the driving factors for higher housing prices is low-advertised supply levels. “Housing inventory is around record lows for this time of the year and buyer demand is well above average. These conditions favour sellers. Buyers are likely confronting a sense of ‘fear of missing out (FOMO) which limits their ability to negotiate. Vendor discounting rates were estimated at a record low of 2.6% in February, and auction clearance rates have consistently been in the high 70% to low 80%, which is well above average,” Mr Lawless said.
| All dwellings | Auctions | Clearance rate | Private sale | Monthly home value change |
|---|---|---|---|---|
| VIC | 787 | 84% | 1320 | ▲ 2.06% |
| NSW | 485 | 92% | 1765 | ▲ 2.47% |
| ACT | 53 | 92% | 76 | ▲ 1.87% |
| QLD | 73 | 78% | 1242 | ▲ 1.47% |
| WA | 1 | 100% | 606 | ▲ 1.55% |
| NT | 0 | 0% | 30 | ▲ 0.74% |
| TAS | 0 | 0% | 196 | ▲ 2.50% |
| SA | 42 | 83% | 356 | ▲ 0.75% |
* Australian auction results, clearance rates and recent sales for the week ending 28 February, 2021.
* The clearance rate is preliminary and current as at 10:53 am ADST, 1 March, 2021.
As the end of the month approaches, we’d like to wish you and your family a very happy and safe Easter holiday season. Enjoy!
Additional sources:
https://www.corelogic.com.au/research/monthly-indices
https://www.realestate.com.au/news/property-market-set-for-boom-year-number-of-3m-suburbs-to-double-in-2021/
https://www.rba.gov.au/media-releases/2021/mr-21-03.html