Economy & Finance Update
December 2024
Summer has arrived, and while the mercury continues to rise across the nation, the property market is cooling.
According to CoreLogic data, property prices increased 0.1% in November – the weakest Australia-wide result since January 2023.
Nationally, prices grew 5.5% over the year. The median value of a house is now $812,933.
For savvy investors or aspiring homeowners, it could be a good time to consider purchasing while price growth is subdued.
In other news, the federal government’s Help to Buy bill has been passed into law by parliament. The scheme will allow eligible home buyers to co-purchase a home with the government. The federal government will provide an “equity contribution” of up to 40 per cent of the cost of a new home or 30 per cent for existing homes.
If you’re interested in finding out more about the eligibility criteria for the Help to Buy scheme, or you want to organise pre-approval on finance for a property purchase, chat to us today.
Interest rate news
At its final meeting of 2024, the Reserve Bank of Australia (RBA) kept the cash rate on hold at 4.35 per cent.
The decision was widely expected, with headline inflation trending lower.
The latest figures from the Australian Bureau of Statistics showed annual CPI inflation was 2.8 per cent in the September quarter, significantly down from 3.8 per cent in the June quarter. This was largely due to a fall in prices for electricity (thanks to Energy Bill Relief Fund rebates) and automotive fuel.
However, underlying inflation (as represented by the trimmed mean) was still 3.5 per cent over the year to the September quarter.
“While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high,” the RBA said in a recent post-meeting statement.
The next CPI figures are set to be released on January 29, and all eyes will be on the numbers before the RBA’s first meeting of 2025 on February 17-18.
Only one of the big four banks believes the RBA will cut the cash rate in February – all of the others are banking on a cash rate cut in May.
To find out how your current home loan compares to others, get in touch today.
Home value movements
National property price growth continues to lose steam, with dwelling values increasing just 0.1% in November.
Prices were down -0.4% in Melbourne, -0.2% in Sydney and -0.1% in Hobart.
There was a modest climb in Canberra of 0.1%, while Darwin saw prices rise 0.2%, and prices were up 0.6% in Brisbane.
The Perth market continues to perform stronger than others, with prices up 1.1% in November. Adelaide was not far behind, with growth of 0.8%.
“The downturn is gathering momentum in Melbourne and Sydney, while the mid-sized capitals, which have dominated the growth cycle of late, are also losing steam,” said CoreLogic research director Tim Lawless.
Regional housing has been performing better, with the combined regional index rising 1.1% over the past three months compared with a 0.3% lift across the combined capitals.
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 1254 | 57% | 1251 | ▼ – 0.4% |
| NSW | 1083 | 47% | 1668 | ▼ – 0.2% |
| ACT | 74 | 57% | 105 | ▲ 0.1% |
| QLD | 286 | 38% | 1212 | ▲ 0.6% |
| WA | 16 | 44% | 593 | ▲ 1.1% |
| NT | 2 | 50% | 32 | ▲ 0.2% |
| TAS | 2 | -% | 157 | ▼-0.1% |
| SA | 145 | 59% | 294 | ▲ 0.8% |
* Monthly Home Values figures as of 30 November 2024
* Australian auction results, clearance rates and recent sales for the week ending 8 December 2024
* The clearance rate is preliminary and current as of 9:30 am, 9 December 2024
With interest rates still on hold and property prices falling in many markets, now could be an opportunity to plan a 2025 property purchase. Talk to us about pre-approval and start the new year with a bang!
In the meantime, we wish you a safe and happy festive season.
