Monthly Property News 12th Edition 2022.

Inflation rate falls in October.

Welcome to the last month of the year and our twelfth and last edition of the monthly property news for 2022, where real estate information is on the house.

Data is showing that the heat in the economy is easing, which could mean the flattening of the market is near. The ABS has just reported that inflation dropped from 7.3% to 6.9% in October, building approvals for dwellings Australia-wide dropped 6% in October on the back of an 8.1% drop in September, and retail trade turnover fell for the first time over this calendar year.

We are now 6.9% below the December 2021 peak in home prices, but Melbourne had the most modest home price increases over the 2-year pandemic of all capital cities and now sits only at 2.8% above the pre-covid period. Based on our current rate of falls in home prices, it means that by March 2023 all pre-covid gains will be erased. Interest rate rises have increased the fastest since 1994, and Reserve Bank Governor Philip Lowe apologised this week to all home loan borrowers for the reserve bank’s guidance that interest rates were unlikely to rise until 2024. But if Australia’s largest bank, the Commonwealth Bank, sets the cash rate to peak with only one more rate rise.

Melbourne Metro shows declines in the Home Value Index

over November fell 0.8% for all dwelling types, which is the same rate of decline as last month. On a 12-month rolling average Melbourne prices for houses are now down a little over $82,000. However, house prices in regional Victoria is up a little over $18,000. Units are also fairing well in regional Victoria, with a 2.9% increase in prices over the last 12 months.

Looking at the rental market, rents in Metro Melbourne during November again increased. We have now seen the longest string of consecutive rental price growth on record, with rents increasing for the sixth consecutive quarter. Increases in units in Melbourne are now sitting at 13.9% over the last 12 months, and gross yields of units for investors in regional Victoria now sit at 4.4%.

That’s all for this year, and remember the information provided is of a general nature you should always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.

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