According to CoreLogic, Australia’s capital cities recorded the strongest annual rental increase in history. In the year to April 2023, the combined capitals saw an annual rental increase of 11.7%, which was a new record.
The increase has been attributed to a surge in overseas migrants and international students, as well as a shortfall in rental listings of late.
If you’re considering buying an investment property, now could be a good time to talk to us about your finance options and get the ball rolling.
At its May meeting, the Reserve Bank of Australia (RBA) decided to increase the cash rate by 25 basis points to 3.85 per cent.
The move came as a surprise to many bank economists and borrowers, given last month’s temporary pause on the cash rate following 10 consecutive rate increases by the RBA.
The RBA has indicated interest rate rises may continue.
“Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,” RBA governor Philip Lowe noted in his post-meeting statement.
“Given the importance of returning inflation to target within a reasonable timeframe, the board judged that a further increase in interest rates was warranted today.”
With interest rates once again on the move, it’s important to review your home loan and ensure it’s still competitive and meeting your needs.
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In welcome news for property owners, many of the capital cities saw home values increase in April.
Sydney is leading the way, with prices rising by 1.3% in April. They have risen each month since February.
CoreLogic Research Director Tim Lawless said it was becoming increasingly clear the housing market had moved through an inflection point.
“Not only are we seeing housing values stabilising or rising across most areas of the country, a number of other indicators are confirming the positive shift,” he said.
“Auction clearance rates are holding slightly above the long run average, sentiment has lifted and home sales are trending around the previous five-year average.”
Meanwhile, the imbalance of supply versus demand is still having an impact, according to Mr Lawless.
“A significant lift in net overseas migration has run headlong into a lack of housing supply,” he said.
“While overseas migration would normally have a more direct correlation with rental demand, with vacancy rates holding around 1% in most cities, it’s reasonable to assume more people are fast-tracking a purchasing decision simply because they can’t find rental accommodation.”
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* Monthly Home Values figures as of 30 April 2023
* Australian auction results, clearance rates and recent sales for the week ending 7 May 2023
* The clearance rate is preliminary and current as of 11:45am AEST, 8 May 2023
If you’re considering a property purchase, it’s important to line up your finance sooner rather than later. Maybe you’re a renter who has decided it might be easier to buy rather than rent in the current market.
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