April Market Update
Illawarra house prices enjoyed a second straight month of positive returns in April with a 0.7% bump, recovering some of the 13% fall of the last 12 months. Units, however, continued a slight decline – down 0.7%. That brings the median Illawarra property price to $880,958 for all dwellings.
Despite the price rise, analysts are not yet calling a return to the growth with uncertainty around interest rates and tight lending standards putting an anchor on mortgages. Tim Lawless, head of research firm CoreLogic says that the tight rental market, increasing immigration and the expectation that interest rates may have peaked, have put a floor under prices.
“No doubt some buyers are trying to time their purchasing decision to align with the bottom of the market,” Lawless told the Mercury.
Selling in the face of the headlines
With real estate headlines dominating the media, it is understandable that vendors would feel cautious about putting their houses on the market. Rising interest rates and falling prices can feel like a scary combination.
At this time, however, it is important to remember that there are other factors in real estate that make now as good a time as any to list. Low supply on the market is tipping the supply and demand equation slightly in the direction of vendors and putting a floor under prices. A significant boost in migration is also set to lift demand for housing – and there is some cautious optimism among economists that we may have seen the end of the interest rate tightening cycle. It’s also useful to think about markets plural rather than ‘the market’ – after all, you only need one person to fall in love with your place!
Mortgages and Price Expectations
With the Reserve Bank’s surprise interest rate move at the beginning of this month, it is worth understanding the impact of mortgages on vendor price expectations. Put simply there are two main factors that will continue to weigh down on prices. First, there is the cost of servicing a mortgage. With rising interest rates and inflation-induced cost of living pressures, the slice of the pie that goes to monthly payments is increasing, leading to the well documented ‘mortgage stress’.
Closely aligned to servicing the mortgage is the size of the mortgage. Since the Bank started this round of tightening in May 2022 the average loan size has reduced by 30%. It is worth vendors understanding the impact of interest rates on homebuyers.
Suburb Highlight – Keiraville and Gwynneville
These two inner Wollongong city neighbouring suburbs have so much to offer. Of course, there is the world class University of Wollongong complete with the discovery centre which has the little ones enthralled. And while we are talking playgrounds, what about the Botanic Gardens? Just magic! For those of you into your sport, you are spoiled for choice. There’s Beaton Park for the tennis, swimming, the gym, and track and field; then there’s Wiso’s Bowling Club for bowls and a club lunch; shoot some hops at the Snakepit; or enjoy a game of soccer or cricket at the UOW fields with some mates. Then there are myriad of bakeries, cafés and little eateries guaranteed to keep you fuelled all along Gipps Rd. As well as being nestled in behind the freeway for easy access to the Sydney commute, these well-established, tree-lined and leafy suburbs are among Wollongong’s most loved suburbs.
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