1st October 2024 / Jeremy Desmier: Market Update | 28 & 29 September 2024

The last auction weekend of September was a quiet one, due to the AFL Grand Final and school holidays. Numbers will pick up again next weekend and in the meantime, there is still plenty of news happening in the real estate industry!

US interest rate cuts - will Australia be next?

The US Federal Reserve has voted to lower interest rates by 0.05 percentage points in a sign that global war on inflation is finally coming to an end. The move is expected to be welcome news for homeowners not only in the US, but also in Australia.

The Reserve Bank of Australia's (RBA) inflation target aims to keep consumer price inflation between 2 and 3 per cent. It is currently 3.8 per cent, but it is generally trending down after jumping to dizzying heights during the COVID-19 pandemic. A number of Aussie market experts are now tipping as many as four rate cuts next year, which could reignite another nationwide property boom. The RBA is expected to first cut interest rates by 25 basis points in February, with three more by August, according to market expectations.

Aussie real estate prices take unexpected turn

PropTrack's Home Price Index released Tuesday showed national home prices inched up 0.04 per cent over September, with the growth described as "flat" and much slower than the rises recorded over winter when there were far fewer properties up for sale. PropTrack economist Eleanor Creagh said buyers were benefiting from more choice in most areas.

"Though prices are rising, sustained high interest rates, cost of living pressures, weak consumer sentiment and affordability constraints are weighing", Ms Creagh said. "Buyers have more properties to choose from, though uncertainty around the timing of interest rate cuts is likely also having an impact on the pace of growth." Once rates are cut, buyer demand is likely to exceed supply again, with prices continuing to lift over the coming months at a slow pace.

"Housing demand remains resilient, defying affordability constraints with prices lifting across much of the country in September, albeit at a slower place in most markets", Ms Creagh added.

Melbourne's overlooked markets

Affordable suburbs in Melbourne that were written off as boring or with a bad reputation have been tipped as the big winners of the city's next housing boom. From Werribee in the city's west to Bellfield in the north and Croydon in the east, areas that have rarely been near the top of shopping lists are poised for a lift as affordability and surging migration drives buyers their way, according to Realestate.com.

Five suburbs, which also include Bundoora and Pascoe Vale South, were selected based on features including recreational spaces, cafes, healthcare, transport and freeway access, as well as quality of surrounding suburbs and local education from schools to universities. Affordability was also heavily weighted, with Pascoe Vale South the only suburb with a median house price above $1 million to make the list.

Upcoming Weekend

The volume of auctions scheduled this week is set to bounce back above the 2,000 mark, with more than half of the scheduled auctions to be held in Melbourne. If we can assist with any of your property plans, please give us a call.