BCNW June 2023 Report

June Report

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From our corporate director

Dean O’Brien

“Home prices continue to accelerate”

Welcome to the new financial year and the Reserve Bank of Australia has started off the new year with some good news for homeowners pausing the interest rate cycle and keeping the cash rate at 4.10%, the main reason for doing so would have been because of the better than expected inflation numbers that came out in late June where it dropped from 6.8 per cent in April to 5.6 per cent in May.

Over the four auction weekends in June, the REIV reported 2,196 auctions, of which an overall 1479 sold, providing a clearance rate of 79%. We had school holidays in June, which meant the number of auctions in comparison to May was down, but the clearance rates in June improved over May; in fact, June's clearance rate has been the best result for the "Year to Date".

Traditionally, there is less seller competition in the colder months but selling when the market is this strong is a smarter move then waiting for the warmer spring weather when listing supply is likely to increase, giving buyers more choice which will place downward pressure on sale prices. The other reason to consider selling now rather than waiting is because of fixed-rate mortgages switching to variable rates, and this is certain to increase through the remainder of this year which will have home owners considering a sale of their property due to the now high holding costs.

The Australian Bankers Association (APA), which is made up of the Big 4 banks, has said that around three times as many fixed rate mortgages (222,800) will expire over the June quarter compared to what expired over the March quarter (78,300), and for the September quarter there are also large volumes of fixedrate mortgage expirations with 208,000 and 184,000 for the December quarter.

So, to reiterate, the stronger-than-ever auction clearance rates, shows demand is running strong. The demand is reinforcing property values and creating stability now, so it’s a good environment to sell your home with the least amount of competition possible.

In other news, the Australian Bureau of Statistics (ABS) reported the number of loans issued for the purchase or construction of a new home plunged to a record low in April, down 74% from the January 2021 peak, and retail figures rose 4.2% in May compared to last year. In summary, the reality is interest rates are now a month by month situation, some data points are showing a slowdown but contrary to this some areas are still feeding inflationary pressures.

The Melbourne Metro Home Value Index as reported by Corelogic over June grew by 0.7% or $6,665 on median prices for all dwelling types. Regional Victoria on the contrary experienced a decline of 0.4% or $1,813 on median prices average for all dwelling types.

Now, looking at the rental market rent increases in Melbourne grew strongly in June to post an increase of 1.1% with the median rent in Melbourne for all dwelling types now at $551 a week. Vacancy rates are at 0 8% and Melbourne for the last financial year was recorded as being the cheapest capital city to rent a property in, Hobart was the second cheapest at $552 a week, Brisbane at $614, Darwin $600, Perth $599, Adelaide $549, Canberra $669 and Sydney at $773 a week The news for the rental market looks set to continue with property investment loans for new homes down 74% from the peak in January 2021

That’s all for this month, I hope you are enjoying the winter weather.

Regards,

Dean O'Brien Corporate Director

We lease more.

We lease more.

A snapshot of last months leases.

Carnegie: Couple reaps rewards of selling brick unit before buying dream home

Ray White Carnegie partner Josh Hommelhoff said it was the buyer’s second property purchase.

“She lives locally and wanted to stay in Carnegie,” Mr Hommelhoff said.

“This property just ticked all the boxes and she knows the area really well.”

The successful $965,000 offer blitzed Ms Korb’s reserve by $75,000 and knocked the other two bidders – a couple and a retiree – out of the race.Mr Hommelhoff added that the vendors were “super happy” and looked forward to finding a new property and completing a full renovation there.

Ms Korb also noted her excitement for the next chapter, but said she would miss the Carnegie home’s cosiness.

Amid tough property market conditions, Emily Korb wanted to sell her family’s home before buying a new one.

Ms Korb and her partner purchased their twobedroom Carnegie unit back in 2017 “before any children arrived”, paying $757,500, PropTrack data shows.

The couple made plenty of special memories in the charming brick unit, where they first welcomed home their three children

“It’s been a home for so many firsts,” she said.

They also renovated the interiors in 2021 including upgrading the kitchen, laundry, bathroom and installing hardwood flooring and new carpets.

But as their kids grew older, the pair decided it was time to upgrade – but not without offloading the 3/16 Newman Ave pad first.

“I couldn’t handle a campaign with the kids in the house though,” Ms Korb joked, adding that they were staying with family until they purchased a new place.

“We want to get a house with a back yard and just something a bit bigger that’s closer to the grandmothers.”

After a competitive auction on Saturday, she and her family can finally begin the search for their dream home.

Three bidders competed for the keys to the unit in front of about 30 spectators, before it sold to a woman bidding on behalf of her daughter who was working at the time.

“I just love how well insulated it is, it’s so cosy and warm in winter but cool in summer,” she said.

“As I’m looking around I see with the older homes how poor (insulation) can be.”

She added that the quiet and peaceful neighbourhood had also been a bonus.

The unit was first listed for $800,000-$880,000.

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