Monthly Property News 4th Edition 2023
“10-month streak ends”
Hi Guys, It’s Dean O’Brien from OBrien Real Estate with the fourth edition of the property news for 2023.
It has been a case of 10 and 10. 10 months of falls in home prices have ended, as have the 10 consecutive interest rate rises, with the Reserve Bank deciding to place a hold on increasing rates in April. As reported by CoreLogic, Melbourne home prices increased 0.6% in March, and auction clearance rates increased to 77% last weekend with a substantial 1188 auctions scheduled. Is this the end of the trough in the market? Are we at the bottom and about to have a steady rise from here on? Regardless of whether we are or not, buying and selling real estate makes sense depending on your situation rather than depending on where the market is, particularly when you are changing places, meaning buying and selling in the same market cycle.
The Australian Newspaper reported that the population is forecast to boom by 650,000 over 2 years, with two-thirds of the population moving to Melbourne and Sydney. Melbourne needs to build 100,000 homes in the next 12 months to accommodate this growth, which is great for our economy. Westpac chief economist Bill Evans has wound back his rate rise prediction to a peak of 3.85%, which means we’ll have one more increase. Inflation figures released for February show the inflation rate has beaten expectations, coming in lower than thought by market experts at 6.8% and down from 8.4% in December.
Melbourne Metro declines in the Home Value Index over March grew by 0.6%, however, Sydney prices for March led the nation with a 1.4% increase. Regional Victoria had the slightest of declines, easing 0.1%; year to date, Regional Victoria is 1.3% down; however, the COVID trough to the peak was 35%, so this market is still in great shape.
Looking at the rental market, gross yields in units across Melbourne and Regional Victoria are continuing to grow for property investors, with Metro Melbourne at a yield of 4.4% and regional at 4.5%. Growth in rental prices in Melbourne has been 14.6% over the last 12 months, and the inner city market is up 30% in its rental prices. With a population boom expected to continue, this trend is likely to increase.
That’s all for this month, I’m Dean O’Brien, and remember that 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.