This month’s market update

New data by research company CoreLogic showed that the Home Value Index rose by 0.6% in April, continuing a fifteen-month streak of positive returns for the Australian property market. Overall, housing has put on 11.1% since January 2023.

The median house dwelling now stands at $779,819.

CoreLogic Head of Research Tim Lawless says that an easing of prices in the near future is unlikely, as worsening affordability, higher interest rates and a lack of supply continue to drive up prices. The regions continue to outpace the capital cities as people move out further in search of more affordable housing and more flexibility when it comes to work.





  Housing – What’s the Plan? 

Housing seems to be in the headlines for all the wrong reasons, as rental affordability, low supply and high income to mortgage ratios dominate news cycles. But what is the government plan to address the shortage in numbers?

The Albanese Government will kick off a plan to build 1.2 million new dwellings over the next five years starting on 1 July. That means 60,000 new homes per quarter (or 240,000 new home annually) will have to be built to meet the targets.

Figures from the Australian Bureau of Statistics show just how ambitious the plan is when a record 223,000 dwellings were built in the year to March 2017. The Government will have to beat that record five years in a row.

To complicate matters, the plan is being carried out in the face of increased immigration and the high cost of building materials and AMP chief economist Shane Oliver told the Fin Review that currently we are lagging behind by 80,000 new dwellings.

Who’d be a politician?




  Trains and high density housing

Anyone who has lived in the Illawarra for more than a decade and has two pairs of working eyes can see that when it comes to housing supply in the CBD – the only way is up! The length of Crown St and the few blocks either side has seen rapid growth in the construction of new apartments, transforming the city skyline on the view back from City Beach to Mt. Keira.

That trend is set to continue in the suburbs under the NSW Government decision to build high density housing around 31 train stations from Newcastle to Wollongong. That means the stations of Dapto, North Wollongong and Corrimal will fall under the Transport Oriented Development (TOD) plan, a scheme that will allow planners to override the planning and heritage decisions of local governments in the 400 metres around a list of nominated train stations.

The changes, which came into effect at the end of April, will no doubt mean that those in the outer suburbs will start seeing cranes dotting their skylines soon.



  Taylor Swift and Interest Rates 

Those adopting the hope and pray strategy for a fall in interest rates could be waiting a little while yet, as economists from the Big Four banks looked into the crystal ball and warned that mortgage holders may not see relief for another 6 months.

The updated forecast has pushed back hopes of a rate cut by two months.

Sticky inflation figures are still a worry for the Reserve, a fact that is being complicated by a net increase in immigration which is putting upward pressure on prices. Paradoxically, a larger than expected fall in consumer spending has kept small business owners up a night, who will also be sweating on the Reserve to loosen the spending levers.

The Taylor Swift spending spree in February failed to flow through to March, resulting in a record month on month fall in spending.

Once again – inflation, interest rates and cost of living pressures make spending in Australia a bit of a basket case.





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