Property market warms up across Australian capitals | Kanebridge News
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Property market warms up across Australian capitals

There’s signs of life but vendors are proceeding with caution

By KANEBRIDGE NEWS
Thu, Mar 23, 2023 10:56amGrey Clock < 1 min

Summer might be over but the residential real estate market continues to warm up with the second busiest auction week this year planned for this weekend, according to data from CoreLogic.

A total of 2,226 homes are scheduled to go to market, a 7.1 percent increase on the previous week.

Melbourne is leading the way, with 1,160 homes going under the hammer, up 10.8 percent on the week before. It’s slightly quieter in Sydney, perhaps due to the NSW State election this weekend, with 851 homes scheduled for auction, representing a 8.8 percent rise on the previous week.

It’s a different story in the smaller capitals, however, with Brisbane hosting 132 auctions (compared with 138 the week before), followed by Adelaide with 130 (119 the previous week) and Canberra with 93 (123 the week before). Perth has 14 homes due to go to auction this weekend, while Tasmania has four.

While the available homes for sale is showing stronger growth, the CoreLogic data reveals that the combined capital auctions are still down -29.4 percent on this time last year as the market continues to process successive interest rate rises.

Economic experts are predicting a hold on further interest rate rises when the RBA meets next month. 



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RBA Governor explains the rate rises we had to have

Philip Lowe’s comments come amid property industry concerns about pressures on mortgage holders and rising rents

By KANEBRIDGE NEWS
Wed, Jun 7, 2023 2 min

Leaders in Australia’s property industry are calling on the RBA to hit the pause button on further interest rate rises following yesterday’s announcement to raise the cash rate to 4.1 percent.

CEO of the REINSW, Tim McKibbin, said it was time to let the 12 interest rate rises since May last year take effect.

“The REINSW would like to see the RBA hit pause and allow the 12 rate rises to date work their way through the economy. Property prices have rebounded because of supply and demand. I think that will continue with the rate rise,” said Mr McKibbin.  

The Real Estate Institute of Australia  today released its Housing Affordability Report for the March 2023 quarter which showed that in NSW, the proportion of family income required to meet the average loan repayments has risen to 55 percent, up from 44.5 percent a year ago.

Chief economist at Ray White, Nerida Conisbee, said while this latest increase would probably not push Australia into a recession, it had major implications for the housing market and the needs of ordinary Australians.

“As more countries head into recession, at this point, it does look like the RBA’s “narrow path” will get us through while taming inflation,” she said. 

“In the meantime however, it is creating a headache for renters, buyers and new housing supply that is going to take many years to resolve. 

“And every interest rate rise is extending that pain.”

In a speech to guests at Morgan Stanley’s Australia Summit released today, Governor Philip Lowe addressed the RBA board’s ‘narrow path’ approach, navigating continued economic growth while pushing inflation from its current level of 6.8 percent down to a more acceptable level of 2 to 3 percent.

“It is still possible to navigate this path and our ambition is to do so,” Mr Lowe said. “But it is a narrow path and likely to be a bumpy one, with risks on both sides.”

However, he said the alternative is persistent high inflation, which would do the national economy more damage in the longer term.

“If inflation stays high for too long, it will become ingrained in people’s expectations and high inflation will then be self-perpetuating,” he said. “As the historical experiences shows, the inevitable result of this would be even higher interest rates and, at some point, a larger increase in unemployment to get rid of the ingrained inflation. 

“The Board’s priority is to do what it can to avoid this.”

While acknowledging that another rate rise would adversely affect many households, Mr Lowe said it was unavoidable if inflation was to be tamed.

“It is certainly true that if the Board had not lifted interest rates as it has done, some households would have avoided, for a short period, the financial pressures that come with higher mortgage rates,” he said. 

“But this short-term gain would have been at a much higher medium-term cost. If we had not tightened monetary policy, the cost of living would be higher for longer. This would hurt all Australians and the functioning of our economy and would ultimately require even higher interest rates to bring inflation back down. 

“So, as difficult as it is, the rise in interest rates is necessary to bring inflation back to target in a reasonable timeframe.”

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