After a long time of higher interest rates and inflation, the Reserve Bank of Australia (RBA) put a halt to the rate hikes on April 20, 2023. The decision has raised hopes of stability and may bring more first-time home buyers to the market for housing.
Signs Of Property Market Stabilising
There are a number of indications that the property market could be stabilizing.
Rising Auction Clearance Rates
The total sale clearance rates for the major cities in Australia have increased from 61.5 percent to 68.1 percent between the third and the second week of April. The rate has also been over the 10-year average for six of the last eight weeks. Auctions are taking place in Australia’s two major markets, Sydney and Melbourne, which are rising. The positive changes indicate that buyers are building confidence.
Easing Rate Of Decline
The CoreLogic National Home Value Index (HVI) has shown a significant reduction in the declines in home values during February. It also recorded an increase of 0.6 percent rise in March, which was the first month-on-month increase over the April of last year. CoreLogic’s Research Director Tim Lawless noted that the market for housing has stabilized already because of factors like the restrictive rental conditions, the increase in demand from international migration, and the rise in clearing rates for auctions.
Stronger Demand For Housing
CoreLogic says that there is an increasing demand for housing despite the shortage of housing. In spite of high rates of interest, first-time buyers are deciding to buy homes due to the crowded rent market and rising rents. This can be seen in more favorable auction clearance rates as well as in CoreLogic’s forecasted sales volume, which increased by 10.4 percent in March. The number of listings for properties has also increased, possibly because of the RBA’s decision not to continue the rate hikes in cash before increasing rates to 3.85 percent in May.
Home Prices Are Recovering
Due to the increased demand for homes, prices have been trending higher. CoreLogic’s daily HVI has risen by 0.9 percent since the beginning of March, and the increase in home values can be seen in approximately 35% of the suburbs studied during the March quarter. CoreLogic’s monthly index indicates that the Sydney market has retreated after it hit its lowest point at the beginning of February. It has since grown by around 2%. However, Melbourne was at its lowest in March and has since increased by 0.7 percent. Experts believe this could be a sign of an additional increase in prices. However, fees could still drop in the event that the interest rates keep rising.
Improvement In Consumer Sentiment
Despite the overall level of confidence being quite low – 10.4 percent lower than April of last year – Westpac-Melbourne Institute’s most recent report indicated how there was a rise in the Consumer Sentiment Index, improved by 9.4 percent in April as compared to March, in response to the decision of the RBA to suspend the rate hikes for cash.
Don’t Miss This Opportunity!
We can assist you in securing your dream home in a stable market. Get in touch with our Home Loan Experts’ mortgage brokers now to get an understanding of what’s going on and how we can assist you in finding a home. Contact us at 1300 889 743 or complete our no-cost assessment form online prior to it becoming too late.
What Does This Mean For First-Home Buyers?
Buyers can benefit from today’s market trends as interest rates fall and home prices rise. Here are some of the factors that can work in the favor of first-time buyers.
Cash Rate Is Closer To Its Peak
Recent statements and actions by the RBA indicate an increase in the rates of interest. Has reached its peak or is close to it. This is great news for buyers who are buying their first home since it means that they won’t need to be concerned about rising interest rates, and costs for borrowing could not increase further.
Home Prices Are Likely To Be At Or Near The Bottom
The recent rise in the HVI in March shows that home prices are nearing or may have already reached their lowest levels. This will allow first-time buyers to find an apartment without putting pressure on rising prices.
Despite recent positive indicators regarding the real estate market, experts warn that it’s still too early to conclude that the market is at its lowest point. The potential for risks like future interest rate hikes and homeowners moving from fixed rates that are lower to higher-cost repayments could impact the recovery of the market.
Things To Consider
First-time homebuyers can make educated choices by taking into account the following factors:
- It’s difficult to determine the lowest price; however, getting close is a good thing. Study the market to learn about the trends and costs currently in place.
- The recent upswing in prices for homes may be a minor reverse; however, it’s not clear whether prices will continue to increase or decrease further. It’s all dependent on the economy.
- The changes to policy changes in the NSW stamp duty policies will mean that there is no stamp duty for homes that are worth $800,000 or more and concessions for properties worth between $800,000 to $1 million can have a major impact on first-time home purchasers who are in Sydney. Sydney market.
- It is recommended to be approved and actively seeking homes since those who are ready are more likely to succeed.
- Find regions that have seen a greater decline in price and may provide more value for money.
- Engage with sellers to negotiate a lower purchase price or to negotiate other favorable conditions.
Take your time and avoid quick decisions to ensure the most long-term success.
