As expected, the monthly Core Logic housing index showed that prices continued to decline in August, with a 1.6% drop across the nation. It was the biggest monthly fall since 1983, reflecting the rise in interest rates, cost of living pressures and tighter bank lending standards. While Sydney and Melbourne property prices have led the march downwards in the last few months, pricing pressures are now being felt in regional areas such as the Illawarra and Hunter.
But the falls should be seen in a wider context, with house prices still up 28% in the last two years.
Where’s the spring market going?
If only we had a crystal ball, right? While spring is one of the most popular times to sell houses and apartments, there are a few factors this year which are causing buyers and sellers to tread a little more carefully.
First, the direction of interest rates. There is little doubt that the RBA is on a mission to stamp out inflation and every rate rise erodes affordability and borrowing capacity just that little bit more (with the flow on effects of house price declines). Keep those eyes peeled for bank movements on long term rates. But the silver-lining is that low unemployment is providing a buffer against distressed selling. There are also no indications that a wave of new stock is coming onto the market on the next few months, and this is providing further support to house prices.
Where is spring going? Only time will tell.
New renovation energy saving regulations
New environmental regulations released this month by the NSW state government mean that renovations over $50,000 will now have to meet a 7-star energy efficiency rating. The changes, designed to drive down the state’s carbon emissions, come into effect from October 2023.
Achieving the 7-star rating might mean adding solar panels on the roof or increasing insulation. The new measures are about striking a balance between comfort, energy savings and meeting the net zero target by 2050.
Do house prices really double every 10 years?
Pontificating over housing prices is a popular pastime around Australian BBQs. And one of the most taken-for-granted myths is this: house prices double every 10 years.
Now in a new study that has tracked house prices over 30 years, CoreLogic has shed light on that myth and the verdict? Not quite true. In the decade to July 2022, house prices put on a (still respectable) 72% and 382% since 1992. Still eye-watering – but not a doubling every ten years. Of course, we are talking about national averages here and these don’t take into account pockets of boom (and gloom).
House prices are very much a reflection of the state of the economy: housing supply, population growth, interest rates and bank lending standards, investor activity and employment. I wonder where we will be in 2032?
Spotlight on Cordeaux Heights
For Sydneysiders looking to make the move south, one of the best family friendly suburbs is Cordeaux Heights.
Only a 15-minute drive from the Wollongong CBD, it has quality schools, quaint shops and rows of beautiful homes. Turn your head west and you’ll be spoiled by the magnificent views of the escarpment and nearby Mt. Kembla. Both leafy and hilly, it is popular for early morning walkers who enjoy crisp starts to the day and has a reputation for blazing sunsets at the end of the day. It’s only a short drive to the heritage listed Mt. Kembla Village hotel (hint, ‘the village’ is about 10 minutes further up the mountain), major shopping centres and close transport links to Sydney and south.