Winter has arrived quickly and we’re hoping you’re well and keeping warm. Recently the property market slowed down considerably with the COVID-19 pandemic having a huge impact. Find out more about home value movements in each state below.
Interest rate news
The Reserve Bank of Australia (RBA) announced it has decided to keep the official cash rate unchanged at 0.25% at its meeting on the 2nd June.
According to the RBA, the pace of recovery for the quarter beyond June is uncertain. The outlook will depend on the extent to which the market continues to be affected by social distancing and other containment restrictions. RBA governor Philip Lowe said in the previous meeting that the Board will not increase the cash rate until progress is being made towards full employment and inflation is sustainably within the 2-3 per cent target band.
Interest rates remain low for some time and there are plenty of competitive home and property investment loans available. Talk to us to make sure you’re getting the right deal for you.
Home value movements
We have seen a reduction in home values in May as the market activity showed more positive signs. The Home Value Index report from CoreLogic shows that the estimate of sales activity bounced back by 18.5% in May after a drop of 33% in April. CoreLogic head of research, Tim Lawless, said “Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction. With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”
Melbourne’s housing market has posted the largest fall over the month, down at -0.9% May. Home values were also down in Sydney (-0.42%), Brisbane (-0.08), Perth (-0.56%) and Darwin (-1.59%), but rose in Canberra (+0.55%), Hobart (+0.77%) and Adelaide (+0.45%).
Property market activity
* Monthly Home Values figures as at May 31, 2020
* Australian auction results, clearance rates and recent sales for the week ending May 31, 2020. The clearance rate is preliminary and current as at 10:00 am, June 1, 2020.
We’re here to help you achieve your property goals
While the immediate indicators are showing improvements, the longer-term outlook of the housing market remains uncertain. With property prices easing you might have plans to take this opportunity to explore new property options. If you’re a business owner, you might also take this chance to take advantage of the increased instant asset write off threshold for assets up to $150,000, so let us know if you need help with getting your finance organised quickly before the end of the financial year. Please get in touch today.
Additional Sources:
www.corelogic.com.au/research/monthly-indices
www.realestate.com.au/auction-results/
www.rba.gov.au/media-releases/2020/mr-20-13
www.corelogic.com.au/news/housing-values-edge-lower-may-while-transaction-activity-partially-recovers-sharp-drop-april
