Victoria’s Record-Breaking Month Boosts Confidence
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Victoria’s Record-Breaking Month Boosts Confidence

Clearance rates for February were at an all-time high.

By Terry Christodoulou
Tue, Mar 16, 2021 9:37amGrey Clock < 1 min

Last month, Victoria saw the highest ever monthly auction clearance rate for February.

Data from the Real Estate Institute of Victoria shows that February 2021 recorded an 84.8% clearance rate from more than 3000 auctions, beating out an 11-year record of 84.0%

17 suburbs were highly sought after having cleared 100% of listings. Those suburbs included: Hawthorn East, Fitzroy North, Ferntree Gully, Rowville, Brunswick East, Sandringham, Seaford, Collingwood, Ashburton, Blackburn South, Fawkner, Wantirna, Boronia, Fairfield, Hillside, Seddon, and St Kilda West.

Beyond suburbs at the top of the class, the best improvements on last year were in Sunshine North, Dingley Village, Gladstone Park, Ashwood, Albert Park, Fitzroy North, Doncaster, St Kilda West, Montmorency, Hoppers Crossing, and Templestowe.

Performance has been supported by incentives for First Home Buyers, mortgage repayment holidays and low interest rates.

While the market is steaming ahead, changes to the Residential Tenancy Act – which come into effect at the end of this month – are sure to disrupt the market, bringing more red-tape and increased ownership costs to investors.

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Amid looming rate rises, there are reasons to be cheerful as mortgage holders head into 2023

By KANEBRIDGE NEWS
Mon, Feb 6, 2023 2 min

Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”

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The market is forced to confront the impact of COVID lockdowns.

Becoming Australia’s most expensive property sale of 2021.

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