Market Essentials – May 2023

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Market Essentials – May 2023

After a recent review, the RBA is set to undergo the biggest reform in decades, effective 1 July 2024, with the current board losing its powers to set the cash rate. According to Treasurer Jim Chalmers, the most significant change involves the creation of two boards, one for governance and one for monetary policy, with the latter having dual objectives: monetary stability and employment.

The latest quarter ABS figures show inflation has peaked and is on its way down, justifying the RBA’s decision to halt rate hikes last month. Despite the rate hikes to date, CoreLogic’s data shows clear signs of property prices recovery, with most capitals showing a positive percentage increase this month.

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Market Essentials – April 2023

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Market Essentials – April 2023

CoreLogic’s latest figures are showing strong signs of an ending downturn, with some of the most-affected markets, such as Sydney, already starting to recover.

Meanwhile, Australian borrowers have received some respite this month, with the RBA deciding to pause rate hikes for April after 10 consecutive rises. The successive rate rises had garnered negative reactions from the market and industry experts, however it remains to be seen whether this will be the last of the increases, or simply a pause for the time being.

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Market Essentials – March 2023

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Market Essentials – March 2023

The latest PropTrack data this month shows the market downturn is losing momentum, with the overall national home prices rising by 0.18% in February caused by tight supply and continued buyer demand.

However, according to Realestate.com.au Senior Economist Eleanor Creagh, this may not be the end of the downturn just yet. She says that ‘with additional rate rises expected, borrowing costs will continue to increase and borrowing capacities will be further reduced, weighing on prices’.

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Market Essentials - February 2023

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Market Essentials - February 2023

After the RBA’s most aggressive tightening cycle in over 30 years, top experts surveyed by The Australian Financial Review predict only two further rate hikes in 2023 as the RBA pauses to evaluate the effects of the fixed-rate mortgage cliff.

According to CoreLogic’s records dating back to 1980, Australia has experienced the worst property downturn in history, with the average dwelling price dropping by 8.4% between April 2022 and Jan 2023.

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Market Essentials - December 2022

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Market Essentials - December 2022

This month Super funds announced plans to invest $41 billion in properties over the next 10 years in line with the government’s housing accord. According to the Industry Super Australia report though, one of their biggest roadblocks will be insufficient large-scale developments to invest in.

Beta Shares modelling shows mortgage affordability at its lowest since 1990, with an average mortgage repayment to income ratio of 42.8%. The low employment rate is keeping mortgage arrears at bay, but further rate hikes may bring these to a tipping point.

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Market Essentials - November 2022

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Market Essentials - November 2022

The RBA increased the cash rate by a further 25 basis points this month, bringing it up to 2.85%. Current rates are still considered modest by economists in light of the highest inflation on record in three decades.

The new Federal government has delivered its first budget this month with a plan to build 1 million new homes over the next 5-years. The plan provides for 30,000 social and affordable rental homes.

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