Meanwhile, nationally home values are falling at the fastest pace since the 2008 Global Financial Crisis (GFC). CoreLogic Research Director, Tim Lawless, recently said that the market had moved in favour of buyers over sellers, especially in cities like Sydney and Melbourne.
If you’re planning a spring property purchase, speak to us about pre-approval on your finance.
Interest rate news
At its August meeting, the RBA hiked the cash rate by a further 50 basis points to 1.85%.
It’s the fastest tightening action in almost 30 years to try to address inflation and the first time since the introduction of inflation targets in 1990 that the RBA has increased the cash rate four months in a row.
For the average borrower with a $500,000 loan and 25 years remaining, the rise will result in a $140 a month increase– or $472 since the RBA began putting up rates in May 2022.
More cash rate increases are expected. Recently Treasurer Jim Chalmers said customer price inflation was forecast to peak at 7.75% by December and would not fall within the RBA’s target range of 2 to 3% until 2024.
If you’re struggling to meet your mortgage repayments with the recent interest rate rises or you want to review your home loan, talk to us. We’re here to help.
Home value movements
Australian property prices are falling at the fastest rate since the 2008 financial crisis, according to the latest CoreLogic figures.
The nation’s median property value has dropped by 2% since the beginning of May to $747,182.
In July, we saw Australian dwelling values fall by -1.3%, with five of the eight capital cities recording a month-on-month decline.
Mr Lawless said housing market conditions were likely to worsen as interest rates surge higher to the end of 2022.
“The rate of growth in housing values was slowing well before interest rates started to rise, however, it’s abundantly clear markets have weakened quite sharply since the first rate rise on May 5,” he said.
“Although the housing market is only three months into a decline, … the rate of decline is comparable with the onset of the GFC in 2008, and the sharp downswing of the early 1980s.
“In Sydney, where the downturn has been particularly accelerated, we are seeing the sharpest value falls in almost 40 years.”
Regional markets have also softened.
|All dwellings||Auctions||Clearance Rate||Private Sale||Monthly home|
|NT||4||– %||25||▲ 0.5%|
|TAS||0||– %||136||▼ -1.5%|
If you’re looking to make the most of the price drops this spring, get in touch to arrange pre-approval on your finance now. We’ll line you up with a competitive home loan that meets your circumstances and goals.
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