Marshall White Finance - May Update

Following the RBA’s decision to lift the interest rate by 0.25% to 3.85%, we are still seeing promising indicators for the property market and those seeking a level of security when buying or selling.??

We now expect interest rates and property prices to stabilise over 2023, with a broadly flat outcome nationwide for the remainder of the year. In 2024, we expect property?prices to rise by ~5% nationally, supported by expected interest rate cuts from the RBA over the year.?

Growing speculation that the rate increase cycle is coming to an end was a likely factor bracing property demand. CoreLogic’s Research Director, Tim Lawless recently said, “This could be contributing to a broader perception that the market has bottomed out, and for those attempting to time the market, that it is considered to be a good time to buy,” Lawless said. “As interest rates stabilise, there is a good chance consumer sentiment will improve, bolstering housing market activity from both a purchasing and a selling perspective.”??

Recent buyer behaviour does however indicate the market is generally following the age-old “as safe as houses” mindset, which has kept heat in the market, with some buyers able to outrun the interest rates and stay ahead of inflated repayments.???

“The last time we saw housing values trending higher through a rising interest rate environment was during the mid-to-late 2000’s when the mining boom was underway. This period was also characterised by surging net overseas migration that contributed significantly to housing demand,” Mr Lawless continued.??

In correlating positive news, labour markets are expected to remain tight, meaning the risk of distressed selling should be contained. Unemployment continues to track around generational lows, holding in the mid 3% range since June last year compared with a pre-COVID decade average of 5.5%. Both public and private sector forecasts have the unemployment rate rising but remaining well below the decade-average benchmark, continuing the promise of market stability we are hopeful for in Australia.??

To discuss the current market in more detail and the impact it may have on your personal financial standing, contact Head of Marshall White Finance, Harry Bongiorno directly.??

Contact:??

Harry Bongiorno??

Mobile: 0437 321 976?

Email: [email protected]??