Another record month: The market is in recovery as mortgage rates remain at record lows

Overview

• Our office achieved 11 total of sales this month (on and off market)
• Auction clearance rates reached an unsurpassable 100% in our core area on the weekend
• Auctions are selling well with prices well above the reserve
• Property prices are on the rise & Concord has bounced back in the last month
• Interest rates remained at historic low of 1%, with predictions for a further reduction
• Lending values increased
• APRA remains on track with the Royal Commission’s recommendations

Market changes and DIB CHIDIAC performance

The housing market is continuing to show signs of stabilisation and a steady rise in prices, with the clearance rates overall for Sydney auctions hovering around 80%, compared to 50% this time last year - a clear sign of the market’s ongoing rebound. On Saturday, our core area reached a 100% auction clearance and it is fair to say, that is unbeatable.

As expected, the Reserve Bank of Australia has publicly announced that it is waiting to see the impact of its June and July rate cuts before potentially reducing them even further. The flow on effects of last month’s historically low 1% reduction have noticeably helped stimulate rising demand in the housing market, with buyers and sellers being key beneficiaries of lower mortgage rates. Understandably, the banks couldn’t be busier, so we recommend that if you are looking to buy, that you ensure your finances are ready.

The big question many of our clients have been asking is whether they should sell or lease their property. There is understandable hesitation and uncertainty about the “right time”, as people want to maximise their return in the strongest market possible that will give them the most bang for their buck. We’re predicting rising prices and a strengthening market that will continue to thrive over the coming months. If you’d like to discuss the best path to take with your property, contact us.

Important changes impacting property this month

Interest rates

• In August, the Reserve Bank of Australia (RBA) announced it would continue to hold the official cash rate at 1%, as predicted.
• This reaffirms the view that the RBA would monitor the impact of its cuts before considering a further reduction to the cash rate.
• Analysts expect the RBA to lower the cash rate at least once again before the end of 2019. 

Regulatory changes

• The Australian Prudential Regulation Authority (APRA) has provided an update on the implementation of the banking royal commission recommendations, advising it is on track with all 10 recommendations that were made.

Banks and mortgage lending

• Australian Bureau of Statistic data from June (released in August) shows an overall increase of 1.3% in lending values, driven by owner-occupiers and first home buyers.
• AMP, ANZ, CBA, NAB and Westpac have together paid a total of $119.7 million to customers who suffered loss or detriment because of non-compliant advice given by financial advisers.
• The paid compensation covers a current total of 6,318 affected customers across the five banks, in light of reviews undertaken by the Australian Securities and Investment Commission (ASIC).

Economic forecast

• The RBA Board released a forecast that the Australian economy will grow by around 2½% over 2019 and 2¾% over 2020.
• This outlook is supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, and continued signs of stabilisation in the Sydney housing market.