1/6 Australia’s Property Market All About The Rate Hikes ~ New South Wales
After rate hikes, Australia’s property markets are recovering in different ways. In the recent PIPA National Market Update, increased real estate activity shows renewed confidence in the sector. Informed buyers and investors realize that waiting on the sidelines won’t benefit their portfolios.
The rapid rate rise cycle by the Reserve Bank of Australia (RBA) has surprised borrowers accustomed to historically low-interest rates. With ten consecutive increases, interest rates are now in the 5-6% range, unfamiliar to many. The current cash rate is 3.8%, the highest since 2012. Despite this, there are signs that inflation may have peaked, indicating positive property conditions ahead.
Let’s dive into a state-by-state breakdown:
New South Wales:
Despite ten rate hikes, property values only declined around 12-15% in most areas. The Sydney market has shown resilience and a significant turnaround. Property values in Sydney increased in February and March but remain 12.1% lower than a year ago. Buyer numbers have surged since February, driven by limited stock, migration, and population growth. Rising rents attract investors, but higher interest rates may pose challenges for loan seekers. Homeowners facing difficulties affording properties could present opportunities for astute buyers in the second half of 2023. This is exactly why we encourage investors to keep a healthy cash buffer for their properties.
Next, we explore Victoria’s property market analysis after the rate hikes.
~Integrity Team
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