With Christmas just days away, we’d like to send our very best wishes to you and your family for a happy and safe holiday season. In a few weeks, we say goodbye to 2020. Many of us are breathing a sigh of relief to welcome in 2021, and looking forward to a positive year ahead.
As the holiday season approaches, conditions for the housing market are improving as it continues to recover this month. With the cash rate at its lowest in history, now could be a great time to think about your property purchasing plans for a new home or investment property in the new year. Talk to your mortgage broker about the right finance for your needs today. Here’s our latest market news and insights.
Interest rate news
The Reserve Bank of Australia (RBA) has kept the official cash rate unchanged at 0.10 per cent at its 1 December meeting after slashing it last month to an unprecedented record low. The Board will next meet in February 2021, so the rates are set to remain low into the new year.
RBA governor Philip Lowe said the economic recovery is under way and has been generally better than expected. “Financial conditions remain accommodative around the world, with bond yields near historically low levels. The positive news on vaccines has boosted equity markets, lowered risk premiums and supported further increases in some commodity prices.” Lowe said. The Board’s policy decisions remain to be complementary to the Australian government’s initiatives to support jobs and economic growth.
Home value movements
The property market is heating up – dwelling values rose in all capital cities and regional areas in November. Housing values continued the recovery trend on its second month, recording a 0.8% rise. The biggest jump was seen across Darwin (1.9%) and Canberra (1.9%), where values increased by almost 2%. Hobart (1.4%), Adelaide (1.3%) and Perth (1.1%) also recorded new highs through November, where values in these cities increased at least 1%. The stronger performance across regional areas of Australia continued in November, recording a monthly growth rate at 1.4%, double that of the combined capital cities at 0.7%.
According to CoreLogic’s Head of Research, Tim Lawless, we are likely to see the national home value index surpass pre-COVID levels in early 2021 if the current growth trend persists. “Labour markets are tightening, housing prices are broadly rising, credit flows are trending higher and consumers are more confident now than they were leading up to the pandemic. Most indicators are pointing towards a faster than forecast recovery thanks to record low interest rates along with ongoing fiscal support and containment of the virus.” Mr Lawless said.
CoreLogic data shows that inventory levels remain low across Australia despite a sharp rise in fresh stock being added in the market. The spring property market recorded a 42% increase in the number of new listings added in the market nationally, suggesting a strong rate of absorption due to higher buyer demand. Auction markets were also strong in November where clearance rates held at around 70%, well above the decade average of 61%.
Mr Lawless said that the low advertised stock levels, together with a rising number of active buyers, is creating a renewed sense of urgency in the market. “Buyer demand is mostly being fuelled by a surge in owner occupiers rather than investors, looking to take advantage of historically low interest rates, generous government incentives and an increased state of normality.” he added.
Are you in the market to buy a property this holiday season?
Interest rates are at a historical low and will likely remain so for some time. Now is a good time to discuss your finance requirements to purchase your dream property or conduct a review of your existing home loan, so get in touch today! We’re here to help and will do the hard yards for you so you can concentrate on the fun stuff this summer. Finally, we would like to thank you for your support throughout 2020 and look forward to helping you achieve your property goals in 2021!