Monthly Property News 8th Edition 2024.
“Inflation is tracking inline”
Hi everyone, I’m Jason Mudford from OBrien Corporate with the eighth edition of the property news for 2024.
Underlying inflation came in at the end of July at 0.8%, marginally below expectations of a 1% increase, which is good news because it’s this specific inflation number that the Reserve Bank of Australia watches the most. Annual inflation is now tracking at 3.8%. The Aussie stock market rallied on the news of these inflation numbers and had its biggest day on the market for this calendar year; likewise, July was the biggest month for the year, and the Aussie market hit an all-time record high.
With the encouraging inflation numbers, the commentary from some economists is talking a rate cut might be on the cards later this year, in fact Comm Bank is still predicting a November cut. In the US they kept their rates on hold for August with the prediction being September will be the month for a rate cut. Across the Tasman to New Zealand, they are predicting three rate cuts before the end of this calendar year.
Nationally, average dwelling values climbed by 0.5 per cent in July in what was the 18th consecutive monthly increase in house prices. Bucking the trend is Melbourne with a 0.4% decline in July and 0.9% decline for the quarter. Melbourne’s median home price for combined dwellings sits at $781,949 which is the 4th highest in the country for a capital city and now only sits approximately $5,500 above Adelaide and $8,500 above Perth for buying.
With the number of homes for sale in Brisbane, Adelaide and Perth more than 40 per cent below average for this time of the year, which is the cause for the price increases, it’s a different story for Melbourne, where through late autumn and winter the listing numbers are well above the average, which is the reason why prices have retreated for the last 4 months.
The auction market during the month of July according to the Real Estate Institute of Victoria, was its busiest July since July 2021, with more than 2,102 auctions recorded with a healthy clearance rate of 78.75%.
Rental yields are holding well within Victoria, and indicators of lending is showing confidence from investors is returning to the market, the ABS stating a 3.4% increase in investor lending.
Although the rate of rental growth has slowed a little, the rental market is still very strong, the 10 year average for rental growth pre-covid was 2.7% and we are sitting comfortably double that growth and some more. National building approvals released at the end of July shows a 6.5% decline for the month with Victoria recording a 13.5% decline. While new housing supply remains scarce, investors will continue to enjoy the rental price growth.
That’s all for this month. 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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