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Property market update – April 2021

APRIL RBA UPDATE: CASH RATE REMAINS AT HISTORIC LOW – 0.1%

The market today: a year on from lockdown 

Just over a year ago, we were in lockdown countrywide, and a year on, we’re seeing:

  • End of JobKeeper
  • Expiry of mortgage deferral programs
  • End of rental moratoriums

and yet, we continue to see the strongest property market growth since 1988.

National home value rises at fastest pace in 32 years

CoreLogic’s national home value index recorded a 2.8% rise in March; the fastest rate of appreciation since October 1988 (3.2%). These numbers highlight Australia’s remarkable recovery from the COVID downturn:

  • Conditions remain exceedingly strong with values rising by at least 1.4% nationwide over the month
  • Sydney topped the list for capital gains in March with values rising 3.7%  and 6.7% higher in the past 3 months
  • Dwelling values are now 2.6% higher in Sydney than their peak back in July 2017

RBA data reveals: household debt only increased 0.1% through Q4 last year

The RBA recently updated insights around household debt levels and housing debt relative to incomes. Data revealed that household debt to income only moved 0.1% through Q4 last year – remaining below the previous highs of mid 2019 of 187.1%.

Households are spending substantially less on debt, due to record-low interest rates, leading the APRA to determine a regulatory response in fears of risky lending isn’t warranted right now, with household debt and lending standard quality monitored very closely.

Auction rates remain strong following Super Saturday

On resumption of the Easter long weekend break, national auction clearance rates reflected boom-time market conditions in all capitals, however, Melbourne (79.1%) and Sydney (82.4%) rates have dropped from their previous weekend highs but Sydney remaining above the crucial 80% threshold suggests prices will continue upwards.

Investors slowly joining the house price party 

Experts are expecting the property market to heat up even further as investors are finally making a slow return.

The last few months have seen owner-occupiers take advantage of the historically low borrowing costs while prices for inner-city apartments have weakened, however recent data from the ABS highlights investor activity kept national lending strong over February, with a 4.5% increase at $6.9 billion – the highest result in 3 years.

Soaring prices and attractive cashflows are bringing investors back into the market!

 

 

Guarantor Loans – Watch now

The most common challenge in entering the property market is saving up a deposit. However, you do have other options including a Guarantor Loan. Watch our short video below or get in touch to discuss!

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