1st July 2024 / Jeremy Desmier: Market Update | 29 & 30 June 2024

We endured an artic-like weekend of weather as auction numbers fell for the last week of the financial year. There were 862 auctions held in Melbourne, with CoreLogic recording a preliminary clearance rate of 68.2%.

Over the weekend most auctions were held indoors, due to the wet weather. We still saw three bidders compete to secure the light and bright two-bedroom unit at 5/20 Asquith Street in Box Hill South. In a sought-after pocket within the Box Hill High school zone, the home sold under the hammer.

With the beginning of the new financial year, most taxpayers will see their take-home pay rise as a result of the stage three tax cuts coming into effect, with the increase in incomes raising the maximum amount of money that buyers can borrow.

The REA Group reports that the increase to buyers' budgets is expected to provide a tailwind for price growth in the months ahead, partially offsetting the affordability challenges facing buyers as a result of high interest rates. PropTrack senior economist Paul Ryan said the tax cuts would provide a slight boost to the lower end of the market, given first-home buyers are typically most constrained by borrowing capacities.

PropTrack senior economist, Eleanor Creagh, notes that "although home prices are expected to rise in the coming months, they will likely maintain a slower place through the seasonally quieter winter period, particularly with increasing uncertainty around the outlook for interest rates."

July 1 also marks the start date for the federal government's next 50,000 Home Guarantee places, in which the federal government guarantees home loans for market entrants and struggling single-parents. It slashes the time needed to save a deposit, with applicants needing as little as 5 per cent of their planned purchase price, to make a move - and helps them avoid thousands in lenders mortgage insurance.

The scheme includes 35,000 first-home buyer guarantees for metropolitan areas nationwide, 10,000 places for regional areas and 5,000 dedicated spots for single parents.

Auction numbers will continue to fall in the next couple of weeks, due to the usual winter slowdown and school holidays. Just 758 auctions are scheduled this coming weekend according to PropTrack. Give us a call if you would like to discuss your property plans.