The property market made a strong start through January and it continues to heat up as we progress into February. Dwelling values rose in all capital cities last month, so if purchasing a property was on your new year resolution list, it’s time to talk to Fornaro to get the ball rolling. It’s worth jumping in sooner rather than later, in order to secure a good deal.
The Reserve Bank of Australia (RBA) held its first board meeting on monetary policy for the year last 2 February. The board decided to leave the official cash rate unchanged at the historic low of 0.10 per cent. It also expanded its quantitative easing (QE) program by buying an additional $100 billion of bonds to ensure continuous monetary support.
In the statement after the November cash rate decision, RBA Governor Philip Lowe revealed that the Board is not expecting to increase the cash rate for at least three years, or at least there is a lower rate of unemployment and a return to a tight labour market. Mr Lowe re-emphasised this in his statement after the RBA decided to hold the official cash rate at 0.10 per cent this month. “For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest,” Lowe said.
Australia’s housing market started the year on a firm footing as the national housing values rose to a new record high of 0.9 per cent in the first month for 2021. Regional housing values was up at 1.6 per cent, that is more than twice the pace of the capital city markets at 0.7 per cent. Darwin has recorded the highest jump in housing values at 2.31 per cent followed by Hobart (1.57 per cent), Perth (1.55 per cent) and Canberra (1.19) per cent where dwelling values increased by more than 1.0 per cent. According to CoreLogic’s research director, Tim Lawless, the low interest rates, strong institutional responses and rapidly improving economic conditions have been central factors supporting the rebound in housing markets. “With mortgage rates likely to remain at record lows well into 2022, housing values are expected to keep rising,” Mr Lawless said.
CoreLogic data shows that the available housing supply remain low at the start of the year. Aside from the low listing numbers, one of the factors that affects the inventory levels is the strong absorption rate due to the rising home buyer activity. Mr Lawless said that with housing activity continuing to rise at above average levels while listing numbers remain well below average, the natural consequence is upwards pressure on housing prices. “Advertised supply levels are low while demand is strong. This is a seller’s market, but for some reason we are still seeing below normal vendor numbers across most markets. With sentiment rising and selling conditions favouring the vendor, it is reasonable to expect new listing numbers will rise as the year progresses which may help to temper housing market conditions,” he added.
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* Monthly Home Values figures as of 31 January, 2021
* Australian auction results, clearance rates and recent sales for the week ending 31 January, 2021.
* The clearance rate is preliminary and current as at 12:07 pm ADST, 1 February, 2021.
2021 is well underway, so if you’re in the market to buy a home or invest in property, now is the time to speak to us about your finance options to help you with your property goals this year. Remember, as your mortgage broker, we know the ins and outs of the home buying process so we can help you prepare for the next steps to move forward. Please give us a call to get started on your home buying journey.
Interest rates are expected to remain low for a while, so now could be the time to secure the property you want.
To ensure you’re in a strong position to negotiate throughout the Spring season, be sure to speak to Fornaro today about your finance application.
This article is for general information only.