16th July 2024 / Jeremy Desmier: Market Update | 13 & 14 July 2024

The winter school holidays finished up over the weekend, with a cooling effect on auction numbers with just 1,478 properties auctioned across the combined capitals. Melbourne did record its second strongest early clearance rate of the year, with 73% of the 609 homes auctioned returning positive outcomes, as recorded by CoreLogic.

AMP Chief Economist, Dr Shane Oliver, said the Melbourne property market had a positive weekend in contrast to the soft market trends of the last month. "A little stronger than last week's result, but I suspect this relfects a lower level of listings," said Oliver.

We saw the Reserve Bank board hold the cash rate steady for the fifth consecutive meeting in June, however the meeting minutes showed the board debated a rate rise. The RBA remains cautious about upside risks to inflation, stating "if inflation expectations were to rise materially from current levels, it could require significantly higher interest rates to bring inflation back to target."

However, economic activity was described as "very weak" and "lower than expected". Although labour markets remain tight, the RBA noted that conditions are gradually easing via an increase in the unemployment rate, lower hours worked and fewer vacancies as well as slower jobs growth. Similarly, wages growth is believed to have peaked.

Despite fluctuations, the Australian property market remains one of the world's most resilient, with prices in most capital cities and regional areas currently at an all-time high. The national median house price is now $785,000 however in June 2024, 34% of suburbs had a median house price exceeding $1 million. Although price growth has been more subdued compared to the pandemic period, further growth is expected through the rest of 2024 and into 2025.

Auction activity is set to rebound this weekend, with just shy of 1,800 properties scheduled to go under the hammer across the combined capitals.

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