Now the school year has started and we’re all back at work, it’s time to get ready for a great year ahead in our property markets. It looks as though market conditions will be more favourable for buyers this year, and we’re excited about helping you make your next move in 2016!
Last week, the Reserve Bank of Australia (RBA) met for its first meeting for 2016 and decided to keep the official cash rate on hold at 2.0%. According to RBA Governor Glenn Stevens in his statement after the meeting, the RBA Board is waiting for more economic data to come in before deciding if further cuts to the cash rate are necessary.
The RBA cut the official cash rate in February and May last year, bringing it to historical lows. However many economists and market analysts are predicting that another cut is on the horizon in 2016 and is most likely to occur mid-year.
As expected, property markets around the country have not been seeing much activity during January. Summer is traditionally a slower time of year for property sales and this has been reflected in low auction numbers, with only 336 auctions reported nationwide for the final week of January.
After a very fast and furious year in 2015, NSW only saw 59 auctions in the last week of January, with a clearance rate of just 45%. It is interesting to note that 22 of these properties were passed in, indicating that sellers may be struggling to achieve their expected price.
Victoria held 151 auctions with a clearance rate of 71%, Queensland held 60 auctions with a clearance rate of 50%, South Australia held 97 auctions with a clearance rate of 68%, Western Australia just 29 auctions with a clearance rate of 56%, Canberra had 27 auctions with a clearance rate of 78% and Tasmania held 12 auctions with a clearance rate of 13%.
Clearance rates are significantly lower than we were seeing last year, indicating that the rapid rises in home values we saw in 2015 are slowing considerably, which is good news for first home buyers. During January, Sydney’s home values only increased by 0.51%. However they are still up by 10.52% compared to this time last year. By contrast, Melbourne’s home value growth is still strong, showing a 2.47% increase in January and a 10.97% increase over this time last year.
Other property markets showing a strong performance in January were Hobart, with a rise in home values of 4.67% last month, and Canberra with a 2.76% rise. All other cities showed very marginal movements of less than one per cent.
We can expect to see auction numbers rising again towards the end of February and a busy month in March. Real estate search sites are showing a good supply of housing stock with Domain currently listing over 363,300 properties on the market for sale nationwide.
If you’re planning to purchase a property in 2016, whether you’re a first home buyer, next home buyer or a property investor, we look forward to talking with you about your plans. If you’re thinking about refinancing your home, now is also a very good time to talk with us, as the lenders are offering very competitive rates across the board and some interesting incentive deals. Whatever your plans for 2016, remember we’re here to support you and help you reach your goals, so please give us a call today!
We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. . Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au