Home prices to hit record highs
Depending on which side of the homeowner line you sit on, you’ll be cheering/aghast that analysts say Aussie home prices are on track to reach a new peak. New data from the real estate nerds at CoreLogic shows that 8 months of continuous growth in property prices has left the market 1% below its April 2022 high point. Half of the properties in Sydney now cost more than $1.11 million, while Melbourne’s median price is $776,000. Home prices have increased by 6.6% since January, with CoreLogic researcher Tim Lawless predicting that prices will reach a new national record next month. And that’s creating a headache for new Reserve Bank Governor Michelle Bullock as the board gets together to discuss interest rates today.
Well, the market is still forecasting that the official cash rate will remain on hold for Bullock’s first cycle in charge, although rising home prices and petrol prices staying above $2 a litre have thrown up a question mark. Economists speculate that we’ll get at least one more rate hike before the end of the year. And when it comes to what the experts say, a survey of 42 boffins by the Australian Financial Review suggests that interest rates will begin falling in August 2024 – that’s an update on the previous prediction of May next year. Katrina Ell from Moody’s said bringing rates down will likely be delayed because “underlying inflation pressures are still too hot for comfort”.
And if you feel that way, it’s probably because you’re paying a mortgage and feeling the burn of cost of living pressures… That discomfort is being seen in the official numbers, with the total value of Aussie deposit accounts dipping in the June quarter for the first time in 16 years. The experts say it means that the money we saved on doing anything nice during the pandemic is gone, and many are now turning to credit cards to pay the bills. An internal memo from the RBA also noted that Aussies are skimping on insurance, and that’s “becoming an increasing problem”. We’ll get a clearer picture later this week when the Reserve Bank releases its biannual Financial Stability Review on Friday.
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