The stability of interest rates, with potential increases on the horizon, could lead to a slowdown in property price growth in the coming months, PropTrack reported.
“We don’t think we necessarily have to tighten again, but we can’t rule it out. If we have to, we will,” said RBA Governor Michele Bullock, indicating a cautious approach to future rate adjustments.
The sentiment, coupled with unexpected inflation trends, has diminished hopes for an early interest rate cut.
With interest rates held steady since November, Eleanor Creagh (pictured above left), PropTrack senior economist, noted that the extended pause has boosted confidence among both buyers and sellers, leading to rapid price increases during the summer selling season.
However, Creagh anticipates that this trend may shift as the market enters the winter months.
“While growth in most markets across the country remains pretty robust, we’re now entering that seasonally quieter period,” she said. "Given the timing of rate cut expectations have been pushed back to what looks like early 2025 at the earliest, we'll probably see growth slowing a little bit through the winter months.”
After the RBA’s decision, Knight Frank’s chief economist Ben Burston noted the reduced likelihood of a rate cut this year. Despite buyer caution, strong market forces like rental growth and housing shortages have diminished concerns over interest rates.
“I don’t think the market has been hugely dependent on the prospect of interest rate cuts, so any delay won't critically impact overall sentiment,” Burston said.
Despite a traditionally slow period after Easter, the housing market has shown resilience with strong auction numbers.
“We normally see the total number of homes heading to auction and going up for sale dip pretty significantly post Easter,” said Anne Flaherty (pictured above right), PropTrack economist. “But this year’s been different; we’ve seen really strong numbers of homes being auctioned compared to the same time last year.”
Ray White’s Bianca Denham also reflected on the buoyancy of the market, noting, “We’re not seeing buyers slow down. Our inspection numbers year on year are up 24.5%.”
Melbourne-based buyers’ advocate Cate Bakos described the current market conditions as a “two-speed market,” where properties that are well-presented are selling quickly, while others lag behind.
“Everything that's renovated and really nicely presented is flying with competition, and everything that isn't is languishing,” Bakos said.
This trend highlights the importance of property presentation in a competitive market environment.
While property markets in Victoria and New South Wales experience high volumes of listings, South Australian and Western Australian markets have not seen the same levels, keeping prices elevated in these regions.
“Once rate cuts become likely, we anticipate a resurgence in market demand,” Buyers’ agent Rich Harvey said. “Many are waiting for this signal before making a move.”
Visit the realestate.com.au website to read the PropTrack article in full.
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