THIS MONTH IN RAY WHITE NOW
In February , house prices in Australian capital cities remained stable , according to data analytics company , Neoval . Prices have now increased by 1.9 per cent since December . If this is the end of the pricing downturn , peak to trough , Australian house prices have fallen 6.9 per cent . We may not be in for another COVID-like price surge but it does appear that conditions have stabilised .
If house prices now show a continual increase from this point forward it highlights the complexity of property markets . House prices are very sensitive to interest rates and there is almost complete consensus that these will continue to increase for a bit longer . We also have a lot of loans coming off fixed rates and this is likely to make some investment properties less financially attractive . It will also mean holding a vacant property such as a holiday home is less desirable . It ’ s likely more properties will come to market .
But at the same time , Australia ’ s population is increasing by 300,000 people per annum . Dwelling approvals are falling and construction costs are up 20 per cent , and unlikely to fall . Rents , possibly the best determinant of housing shortages , have been increasing at record rates . The number of properties for sale is down over 10 per cent since last year and the number of active bidders at auction has been steadily increasing since it hit a low in June last year .
This month in Ray White Now we take a look at how each capital city is now performing . Since the start of last year , all capital cities have seen prices declining however the rate of decline has been significantly diverse . Sydney bore the brunt of price declines , while in Adelaide , prices barely moved . In our commercial property article , we ’ ve analysed the sectors that are currently seeing the highest returns . Although returns have come down , industrial remains the asset class outperforming the rest of the market .
We hope you enjoy this month ’ s Ray White Now .
Nerida Conisbee Chief Economist Ray White Group
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