Weekly Market Update (16 February 2024)

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Weekly Market Update (16 February 2024)
  1. Home Price Index (Source: PropTrack)

    The PropTrack Home Price Index report for January 2024 reveals that national home prices saw minimal growth, with prices remaining largely flat in both capital cities and regional areas. Factors such as strained affordability and a recent interest rate rise have contributed to the subdued price growth. While prices in most capital cities remained stable, Perth stood out with notable growth, while Melbourne experienced a decline. Additionally, detached houses slightly outperformed units in price growth. The report also highlights the strong performance of WA regions and provides an outlook for 2024, expecting slow but positive price growth due to factors such as population growth, stable interest rates, and low new building activity.

 

  1. Consumer Price Index (Source: Eliza Owen)

    The Consumer Price Index (CPI) results for the December quarter show a decline in inflation to 4.1% from 5.4%, marking the fourth consecutive quarterly decline. This is attributed to softer demand in the economy, particularly in retail trade and job vacancies. The moderation in inflation could lead to interest rates remaining unchanged in the near term and potentially decreasing later in the year, which may stimulate housing demand. Rental inflation is also showing signs of easing, which could alleviate cost-of-living pressures for tenants. Inflation is still well above the RBA target range of 2-3%, but it is moving in the right direction, and it is falling faster than anticipated. The lower-than-forecast inflation outcome, alongside an expectation of rate cuts later this year, is likely to improve consumer sentiment and support economic recovery.

 

  1. Home Prices (Source: Dr. Andrew Wilson)

    The latest housing market data shows that the national median house price remained steady in the January quarter compared to the previous quarter. Most capital cities experienced decreases in house prices, with unit prices also falling nationally. However, some cities such as Perth, Brisbane, and Canberra saw increases in house prices. Despite declining affordability and higher interest rates, the housing market is expected to report positive results in 2024, supported by a strong labor market and migration. Sydney and Melbourne are still offering value opportunities for buyers, while Perth, Brisbane, and Adelaide are expected to perform well. Overall, the housing market is likely to continue its positive activity in 2024.

 

  1. Unit Price Growth (Source: Brett Warren)

    The housing market in Australia is expected to see a slowdown in price growth due to affordability issues and increased stock. As a result, many buyers priced out of the housing market are predicted to turn to the unit market. A report by Oxford Economics forecasts that unit prices will outperform house prices in the coming years, with units expected to see faster growth, particularly in cities like Perth, Sydney, Brisbane, and Adelaide. The affordability of units compared to houses is a key driver of this trend. Additionally, certain cities such as Perth, Adelaide, and Brisbane are expected to have strong property price growth, while Sydney and Melbourne may experience slower growth in the near future. Property investors should focus on family-friendly apartments in middle-ring suburbs for long-term investment.
  1. CoreLogic Auction Results (Week ending 11 Feb 2024
    (Total Auction / Clearance Rate)

    – Sydney: 647 / 75.4%

    – Melbourne: 664 / 66.9%

    – Brisbane: 151 / 64.2%

    – Perth: 7 / 57.1%

    – Canberra: 61 / 55.7%

    – Adelaide: 111 / 78.4%

    – Tasmania: 1 / 100%

    – Combined Capitals: 1,642 / 70.3%

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