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Property Market Update July 2021

JULY RBA UPDATE: CASH RATE | 0.1%

COVID slaps extra $125,000 on home prices

International consulting and accounting firm KPMG has released a study predicting the effect of the pandemic on house prices in Australia.

The firm, which predicted a 2021 housing boom back in early 2019, said the pandemic would likely cause Sydney properties to be worth 11% more by 2023 than they would have been if COVID hadn’t occurred. This prediction came after the RBA cash rate plummeted from 0.75% down to 0.10%, which was followed by historically low mortgage rates. Adding to this momentum then came the huge wave of FOMO driving buyer demand.

How much more a house will cost because of the pandemic (2023)

Sydney                 $125,000
Canberra              $67,000
Brisbane               $60,000
Hobart                  $50,000
Darwin                  $46,000
Adelaide               $39,000
Melbourne            $35,000
Perth                     $17,000

KPMG’s ‘Covid price premium’

% increase due to Covid by 2023

Sydney                  11%
Canberra              10%
Brisbane               10%
Darwin                  8%
Hobart                  8%
Adelaide               7%
Melbourne           4%
Perth                     3%

Pushback on predictions of early rate hike

Market watchers continue to insist that the RBA will raise the cash rate long before its stated timeline of 2024 at the earliest. However, RBA Governor Philip Lowe suggests that the greatest likelihood is still years away.

SMH Economics editor Ross Gittins presumes that markets and media reports assume they know better because their focus is on the US economy and Wall Street rather than our economy. The rule: whatever the US Federal Reserve is doing, we’ll be doing soon enough – however, this opinion doesn’t account for the big differences between our circumstances and the US when it comes to prices and wages…

Heat remains in the National auction markets throughout winter 

Property auction markets have continued to record strong results for sellers, with no sign of the usual mid-winter slowdown activity.

Even Sydney saw strong numbers considering 100+ auctions were withdrawn due to lockdown signalling plenty more buyers demand.

auction results july21 1

 

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