It’s been a great start to the year for homeowners, with the Reserve Bank of Australia (RBA) keeping the cash rate on hold.
Inflation continues to ease, and the prospect of a cash rate cut by the RBA is looking more and more likely later in the year.
In other news, the housing market upswing is continuing to tick along, with property prices up 0.4% in January according to CoreLogic figures. It was the 12th consecutive month of property value rises.
Meanwhile, auction activity is red hot, with the season kicking off with a bang in the week ending February 4. In fact, it was the second biggest start to the auction season since CoreLogic auction records began in 2008.
Let’s dive into what’s been happening in the property market world across the nation.
Interest rate news
At its first meeting for 2024, the RBA decided to keep the cash rate on hold at 4.35 per cent.
The latest quarterly inflation figures released by the Australian Bureau of Statistics (ABS) showed the consumer price index eased to 4.1 per cent in the year to December, down from 5.4 per cent in the September quarter. In the December quarter alone, inflation slowed to 0.6 per cent, its lowest quarterly reading since March 2021.
Given the inflation figures, many economists are now expecting the cash rate to remain on hold for the early part of 2024, followed by a cut potentially in August or September. But the RBA is not giving much away.
“While there are encouraging signs, the economic outlook is uncertain and the Board remains highly attentive to inflation risks” the Board said in a statement following the cash rate decision.
“The central forecasts are for inflation to return to the target range of 2–3 per cent in 2025, and to the midpoint in 2026. The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out.”
The next RBA cash rate decision will be announced on March 19.
If your fixed term is ending or you’re not satisfied with your current mortgage, it’s a good time to shop around.
We can walk you through your options and find you a competitive home loan that meets your needs.
Home value movements
We’ve seen 12 straight months of property values rising nationally, but some markets appear to be doing better than others.
In Perth, Adelaide and Brisbane, property prices continued to rise at a monthly rate of 1% or more in January. Meanwhile, Hobart, Canberra and Melbourne all saw subtle declines over the month, with property values dropping -0.7%, -0.2% and -0.1 respectively.
House prices increased at a faster rate than unit values last month. Interestingly, the difference in cost between the median capital city house price and the median capital city unit price increased to a record high of 45.2% in January.
The regional housing markets are performing well. CoreLogic figures show the combined regional index rose 1.2% over the rolling quarter, compared to a 1% rise across the combined capitals index.
“Despite ongoing cost of living pressures, high interest rates, low consumer sentiment and affordability constraints, homes are still selling,” CoreLogic’s research director, Tim Lawless said.
“Housing demand has been buoyed by high migration, but also tight rental markets that have probably incentivised renters to transition towards home ownership if they can afford to do so.”
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 624 | 65% | 1018 | ▼ – 0.1% |
| NSW | 773 | 62% | 1437 | ▲ 0.2% |
| ACT | 127 | 59% | 81 | ▼ – 0.2% |
| QLD | 323 | 50% | 1054 | ▲ 1.0% |
| WA | 4 | 50% | 718 | ▲ 1.6% |
| NT | 6 | 67% | 17 | ▲ 0.3% |
| TAS | 1 | — | 129 | ▼ – 0.7% |
| SA | 152 | 75% | 293 | ▲ 1.1% |
* Monthly Home Values figures as of 31 January 2023
* Australian auction results, clearance rates and recent sales for the week ending 4 February 2024
* The clearance rate is preliminary and current as of 3:45 pm, 5 February 2024
If you’re planning an exciting property purchase in 2024, we’re here to help you secure the finance you need to take the next step. Talk to us about getting pre-approved on your home loan today.
Additional sources
CoreLogic RP Data Daily Home Value Index: Monthly Values
https://www.corelogic.com.au/our-data/auction-results
https://www.realestate.com.au/auction-results/
