July 2024 Round Up

July Market Update

In the 18th consecutive rise, house prices added 0.5% nationally to the average dwelling which now stands at $798,207. But according to CoreLogic Head of Research, Tim Lawless, there are signs that the momentum we’ve seen in previous years could be tapering off.

“We’re definitely seeing some momentum coming out of the market and a lot more diversity from city to city,” he said, pointing out that Melbourne landed in negative territory while Sydney continued its climb.

Lawless also says that there is still a deep imbalance in supply and demand which continues to put a floor under prices. The data also points out that units are on the rise again, with some commentators suggesting that the trend is partly due to tenants trying to escape steep rents.

Interest rate decision

The RBA’s decision to hold interest rates at its August meeting at 4.35% was little surprise to observers in light of the continuing easing of inflation – even though it is not yet back into the Reserve’s target band of 2-3%. The inflation figures will cause mortgage holders to breathe a sigh of relief and perhaps allow themselves a little hope that there will be a Christmas cut.

But there is likely to be little material effect of the hold on the overall price of housing according to Tim Lawless from CoreLogic, who writes,

“While stable rates and lower inflation should help to lift consumer sentiment, which has historically shown a close relationship with property sales, the August hold decision may not be enough to see that rise in consumer sentiment flow through to housing market activity. Recent growth in property prices has had more to do with low supply, tight rental conditions and demographic factors than sentiment through the housing upswing to date.

Trust

News this month that Tim has joined 0.6% of the nation’s real estate to be awarded Rate My Agent’s coveted ‘Trust’ award will come as no surprise to those who have dealt with Tim.

With nearly 400 five-star reviews on the platform, the key words used to describe Tim are often trust and transparency. A reading of recent reviews provides an insight into how Tim deals with both buyers and sellers. “Unwavering honesty” is how one buyer described dealing with him.

When it comes to selling your biggest asset, it is important to find someone that you trust. Trust is more than just a word – it means integrity, timely communication, transparency, skilled negotiation, respect for all parties and confidence that your interests will be looked after.

The two big trends shaping real estate

As we move into the second half of the year, it is worth trying to understand some of the big trends that are shaping the market. Taking a clear-eyed view of the market is vital for even the most seasoned property investor.

The first one is the ongoing tight supply of housing which is driving up rents and putting a floor under prices. Although governments have started their ambitious program to build 1.2 million new homes, approvals and commencements are slow. Add to that high immigration levels and it looks like the short fall of housing coming under the market is going to continue to being a strong driver of prices going forward.

The second big trend facing property are the historically high mortgages and interest rates seemingly stuck in gear as inflation remains stubbornly high. With the June quarter figures coming in above the target band, it is unlikely that interest rates will fall any time soon and economists are tipping a Christmas cut at the earliest.