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Property market update – September 2022


House prices drop as cash rates continue to rise

Australian house prices had their largest monthly fall in almost 40 years last month, with new data from CoreLogic showing prices dropped by 1.6%, marking the fourth consecutive month of decline in the national market. The largest decline was in Sydney (2.3%) and Brisbane (1.8%). Until interest rates stop rising, house prices are likely to continue falling. 

A sixth-rate rise is expected for October, however addressing a parliamentary standing committee on economics, RBA Governor Philip Lowe hinted that the upcoming interest rate hike could be halved from the usual 50 basis points. The Governor stated that while further hikes to the cash rate are “required”, it will be necessary to slow the speed and size of those hikes.

Auction clearance rates show clear improvement

CoreLogic Australia‘s preliminary combined capitals clearance rate held above 60% for the fourth week running, with a considerable drop in the number of auctions (132) held in Melbourne due to the grand final long weekend.

The trend in clearance rates is improving, but still remains below the long term average across the major auction markets.Sydney clearance rates have improved from a recent low of 50% over the last week of July to range between 56% and 60% through September to date (10yr average is 67.8%).Tim Lawless from CoreLogic Australia says the improvement in clearance rates may be a sign that vendors are becoming more willing to ‘meet the market’ or motivated to sell early in spring before stock levels potentially rise and dwelling values fall further.
See the data

Demographic trends changing rapidly 

Following a surge in net overseas migration (NOM), demographic trends are changing rapidly across the nation. The quarterly change in NOM in Q1 reached record highs in NSW, VIC, SA, and ACT. The increase in overseas migration is predicted to have an immediate effect on rental demand, at a time when rental markets are already very tight.QLD remains to be at the top of the positive net interstate migration flow, with just over 11,000 more residents arriving than leaving from other regions of Australia, but well down from the record levels recorded through the final quarter of 2021 (19,247).With an additional fall in private sector investment activity which plays an essential role in contributing to rental supply, we’re likely to see the return of overseas migration placing further upwards pressure on rental demand.

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