July Market Update.
Although property prices posted a small gain in July, growth continued to slow for the second month as the heat comes out of a property market that has everyone scratching their heads. CoreLogic’s National Housing Index ticked up 0.7 per cent for the month of July up 4.1% since housing prices staged a recovery in February.
CoreLogic’s Head of Research Tim Lawless sites the emergence of a “significant number of fresh listings” as the cause of the slow, halving the rate of growth which peaked in May. “An increased flow of new listings provides more choice and may be working to reduce some of the urgency felt among prospective buyers,” Lawless said.
On the good news front, easing inflation figures out last month also offered some hope that the interest rate cycle was at – or fingers crossed – nearing its peak. Time will tell.
FOMO and FOMM
Psychology is a powerful force when it comes to parting with our hard earned especially when it comes to buying a house.
In real estate, this is typically associated with Fear of Missing Out (FOMO), the niggling belief that we will be left behind while others enjoy real estate riches and the security of home ownership. But more recently, FOMM (Fear of Making a Mistake) has taken hold as buyers try to second-guess interest rate movements and property market commentators.
That is causing a bit of a bottle neck when it comes to downsizing, as low stock levels leave vendors wondering where they will move to after a sale. But with the spring property market only a month away, Bartlett and Co. Property Principal Tim Bartlett says that trying to time the market is unwise.
“When is a good time to buy and sell? Anytime,” says Tim. “The most important thing you can do is buy and sell in the same market. For those looking to upgrade, selling and buying in a falling market can be a smart decision over the long term.”
Everything in moderation
Anyone with a mortgage knows that in the last 18 months the Reserve Bank has had its knickers in a knot over inflation. But with homeowners increasingly feeling the pinch, news of distressed selling starting to creep into news headlines, and property prices teetering around stable, it is worth considering why the Reserve is so eager to pour cold water over the economy.
And that comes down to your mum’s best advice: everything in moderation dear! The Reserve is trying to hum the economy along at between 2-3% and with inflation stubbornly baked in at about 6ish%, the Reserve is likely to keep hitting the ‘up’ button until prices turn.
That means housing and rents need to rein in. And while housing has clearly taken a breather, rents are still driving up inflation, causing greater costs to investors, who in turn pass costs to renters and suddenly, you have an ugly inflationary cycle. In the relentless pursuit for growth, we should heed another piece of mum wisdom: be careful what you wish for.
Everything in moderation!
We love our property shows!
The Block is back on August 6 and boy oh boy do we love houses on the tele. The Block has got the lot – tears, drama and personal stories that make for great Sunday night viewing.
But why do we love our property shows so much? The stunning growth in real estate prices over the last generation has partly been driven by with our obsession with property shows including The Block, Location, Location, Location and House Rules.
We love talking about our properties and the family home is a mix of BBQ conversation stopper, national sport and store of wealth. Property shows tap into our deep national psyche about home ownership, serve as inspiration for our ‘forever’ home and provide tales of people just like us pursuing the great Australian dream.
Head over to Facebook and tell us your favourite property show.