March was an exciting month in the property world. In the latest CoreLogic report, the national home value recorded the fastest pace of capital gains in 32 years. In March, we have also seen the busiest week for auctions since the week prior to Easter 2018.
Interest rate news
The Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 0.10 per cent at its 6 April meeting. The Board also decided to the maintain the current policy settings, including the yield on the three-year Australian government bond, as well as the parameters of the Term Funding Facility (TFF), and the government bond purchase program.
The COVID-19 support measures such as the JobKeeper wage subsidy, HomeBuilder scheme and loan repayment deferrals ended in March but will likely have a minimal overall impact on the housing market according to realestate.com.au Chief Economist Nerida Conisbee. “We can see that the economy is well on track and the conditions are very strong at the moment,” she said. RBA Governor Philip Lowe said that housing markets have strengthened further, with prices rising in most markets. “Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained,” Lowe added.
Home value movements
CoreLogic’s home value index saw prices rise by 2.8 per cent across all capital cities and the rest of state regions in March. This has been the fastest rate of appreciation since October 1988 at 3.2 per cent.
For the first time in a year, growth in housing values were stronger in the capital city (2.8 per cent) than the regional markets (2.5 per cent). Sydney recorded the highest jump in housing values at 3.7 per cent in March and 6.7 per cent over the first quarter of the year. Hobart (3.31 per cent) and Canberra (2.79 per cent) among the strongest performing markets where dwelling values increased by more than 2.5 per cent in March. The dwelling values for the rest of the capital cities also increased: Melbourne (2.37 per cent), Brisbane (2.35 per cent), Darwin (2.31 per cent), Perth (1.81 per cent) and Adelaide (1.51 per cent).
CoreLogic data shows that the housing market strength is being supported by a disconnect between demand and supply. Total advertised listings has remained very low because of higher buyer demand. “The ratio of sales to new listings is tracking at around 1.1, implying for every new listing added to the market, 1.1 homes are sold. Such a rapid rate of absorption is keeping overall inventory levels low and adding to a sense of FOMO amongst buyers,” CoreLogic’s Head of Research, Tim Lawless said.
|All dwellings||Auctions||Clearance rate||Private sale||Monthly home value change|
* Australian auction results, clearance rates and recent sales for the week ending 4 April, 2021.
* The clearance rate is preliminary and current as at 10:27 am ADST, 5 April, 2021.
Pre-approvals are more important than ever
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