Monthly Property News 3rd Edition 2022
National Home Price grows over 17th consecutive months
Hi Guys, it’s Dean OBrien from OBrien Real Estate with the third edition of the monthly property news for 2022 where real estate information is on the house.
Nationally we posted a 0.6% gain in home prices according to the Corelogic home index report released on 1 March. Australia has now enjoyed 17 consecutive monthly increases in home prices. Melbourne and Sydney are the two markets that continue to show signs of a slowing market, Sydney falling 0.1% and Melbourne posting no price change after posting similar results in December (-0.1%) and January (+0.2%).
Although Melbourne prices remain unchanged the median house price did in fact fall back under $1 million whereas unit prices increased slightly by approximately $2,000 Contrary to Melbourne, Regional Victoria is keeping its growth pace posting another 1.2% gain to register 22.3% annual growth.
Looking at the next slide on rental performance you’ll see that as the consequence of home prices softening and rental price growth holding reasonably firm that rental yield has stabilised and looks to be trending upwards from here. Rental prices in Melbourne over the course of the year have only increased 4.6% for houses and 5.5% for units which when compared to the National average at 9% its relatively a flat increase especially when we compare increases in petrol prices, food and building products. Regional Victoria rental return still favours the property investor with a 3.5% rental return.
With the start of restrictions to finance now in place, and continued talk of interest rate rises it’s worth reflecting on history. For more than 30 years, Australians have largely seen interest rates go only one way. Between January 1990 and November 2020, the RBA cut rates 51 times, taking the cash rate from 17.5 per cent to just 0.1 per cent, however between June 1968 and June 1989, the average standard variable rate went from 5.38 per cent to 17 per cent.
Our financial wellbeing is better now than prior to the pandemic. A report published by the Melbourne Institute and the Commonwealth Bank shows high levels of financial wellbeing is underpinned by healthy household savings. The median savings balance in December 2021 was a massive 42% higher than December 2019. The Victorian Planning Authority has gazetted plans for new housing in Craigieburn West and Shenstone Park in Melbourne’s north and in Lilydale Quarry to the Yarra Ranges in Melbourne’s east. The move paves way for more than 15,000 new homes and more than 6,000 new jobs for our growing city.
That’s all for this month, I’m Dean O’Brien 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.