This Week in Real Estate – 9th June 2023
Gold Coast Property Prices Rise
Regional property prices are on the rise again with some Gold Coast values increasing the equivalent of $1000 a week in the past three months.
CoreLogic figures show that Queensland property prices have been rising since February and that the Gold Coast and Sunshine Coast recorded the highest property price increases for regional Queensland.
Since March 2020 Gold Coast property prices steadily increased to hit a peak in May last year. Since then, Gold Coast values dropped by 7.3% and Sunshine Coast by 12%.
But prices have already started to bounce back, with Gold Coast and Sunshine Coast prices increasing by more than 2% in the past three months.
CoreLogic head of research Tim Lawless says the increases in the past quarter have been “extraordinary”.
“If you think about a typical wage being maybe $60,000 to $80,000, arguably, three or four months of growth is going to be equal to someone’s annual income,” he says.
“That’s a pretty rapid return to growth.”
Quote Of The Week
“Our inflation problem is not because the lowest paid workers are getting paid too much, it’s because of a war in Ukraine and busted supply chains and a decade of neglect.”
Treasurer Jim Chalmers
Rate Hikes Keep Coming
The Reserve Bank of Australia has once again raised the cash rate, its 12th increase since May last year.
While many speculated a halt in rate rises, it increased by 25 basis points to 4.1% when it met on June 6.
According to RateCity.com.au the most recent rate rise will cost the average Australian homeowner an additional $70 a month.
RBA Governor Philip Lowe says the move is necessary to try and control inflation.
“Inflation in Australia has passed its peak, but it is still too high, and it will be some time yet before it is back in the target range,” he says.
“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe.”
While Lowe says there are signs the economy is slowing, inflation is still far outside of its target band of between 2% and 3%.
But he says rising rates and higher costs of living mean household spending will slow which will help ease inflation.
Rents Continue To Soar
Apartments and house rents across the country have been rising, with wages lagging behind.
The median weekly asking rents for capital city units increased 22.2 per cent in the year to March, six times faster than wages.
Despite the increasing financial burden, many are taking a positive approach – moving in with family or flatmates to reduce their costs, or opting to become homeowners.
It is also a chance for people to consider opportunities to look for cheaper properties that can better fit their budgets.
People are changing the type of property they want to rent and changing it to a less expensive property like a townhouse or an apartment.
Westpac senior economist Matthew Hassan said Australian tenants were facing strong competition for homes. Returning migration was adding to already strong demand, amid a time of lower supply.
Rate Hikes Keep Coming
The Reserve Bank of Australia has once again raised the cash rate, its 12th increase since May last year.
While many speculated a halt in rate rises, it increased by 25 basis points to 4.1% when it met on June 6.
According to RateCity.com.au the most recent rate rise will cost the average Australian homeowner an additional $70 a month.
RBA Governor Philip Lowe says the move is necessary to try and control inflation.
“Inflation in Australia has passed its peak, but it is still too high, and it will be some time yet before it is back in the target range,” he says.
“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe.”
While Lowe says there are signs the economy is slowing, inflation is still far outside of its target band of between 2% and 3%.
But he says rising rates and higher costs of living mean household spending will slow which will help ease inflation.
House Prices Surge Again
Low levels of stock throughout most markets means property prices are once again starting to rise.
CoreLogic’s national Home Value Index shows the pace of house price growth accelerated to 1.2% in May, its third consecutive monthly rise since March.
While PropTrack’s Home Price Index puts the increase at 2% across the combined capital cities for the year to date and says in May values went up by 0.33%.
PropTrack senior economist Eleanor Creagh says the rise in prices seen so far this year gathered pace in May, broadening and accelerating across markets.
Creagh says sellers are benefitting from the reduced levels of competition with other vendors.
While Lawless says advertised listings trended lower through May with roughly 1800 fewer capital city homes advertised for sale relative to the end of April.
“Inventory levels are 15.3% lower than they were at the same time last year and 24.4% below the previous
