July 2023 Property Update
We are now half way through 2023, with both house prices and interest rates rising.
The RBA met this week and have opted to keep interest rates on hold, after raising the cash rate 400 basis points over the past 12 months to the current 4.1%.
Whilst many with mortgages are enduring the highest interest rate since 2011, those with cash in the bank are enjoying the higher returns.
The latest monthly CPI from the Australian Bureau of Statistics found inflation had fallen to 5.6% for the month of May, down from the previous month of 6.8%, however it is still above the RBA’s target range of 2-3%.
In June, property prices across Australia increased 1.1%, which was slightly below the 1.2% increase in May. Sydney house prices were up 1.7% in June and 4.9% for the quarter.
Listings are still down, with the combined capitals listings 26.4% below the 5 year average.
Rents are still rising with houses in Sydney up 9.4% and apartments up 18.8% over the past 12 months.
Vacancy rates across the combined capitals is 1.1% compared to the decade average of 2.8%.
With the rise in interest rates, the majority of borrowers have kept on track with their mortgage repayments, with APRA data for the March quarter indicating only half a percent of home loan borrows had fallen less than 90 days behind on their mortgage repayments.
We will continue to see many people refinancing The RBA has previously estimated that 880,000 fixed rate mortgages will expire in 2023, so many will be looking for better deals.
Net overseas migration is expected to reach 400,000 this financial year, which is almost 27% above the previous record high recorded in 2008, so this will likely further increase rents and property prices.
With uncertainty comes opportunities and we are seeing some good buying opportunities at present, so please get in touch if you are considering purchasing an investment property.