The property market has thumbed its nose at higher interest rates, with values rising almost 5% since March. Here’s why national housing prices are climbing higher.
Australia’s housing market is making a bigger comeback than Barbie.
Despite interest rates rising 4% in a year and a cost of living crunch, home values have skyrocketed with prices soaring 4.9% nationally since March 2023.
The strength of the rebound has wiped out about half the losses recorded in the downturn between April 2022 and February 2023, when home values fell 9.1%.
In fact, the value of Australia’s housing market just hit $10 trillion again – the first time the total estimated value hit double digits since June 2022.
So what’s driving home prices higher?
CoreLogic says three factors are pushing up property values:
– Net overseas migration: more people are arriving from overseas than are leaving. That’s a lot of extra people looking for a place to live.
– Use of savings, profit and equity: upgraders are using savings, equity or profits from their home to buy their next place instead of borrowing more. This has seen demand for property stay strong even though rates have climbed higher.
– Tight supply: the volume of homes listed for sale is a lot lower than in previous years. That spells competition between buyers, which is putting pressure on prices.
Will property prices keep rising?
Home values have been rising steadily over the past six months. What happens from here hinges on how interest rates move, and whether the economy stays in good shape.
As a guide, CoreLogic is expecting some heat to come out of the market recovery by the end of 2023.
That’s great news for home buyers – as long as cooler prices aren’t the result of more rate hikes or a sluggish economy.
How to get ready to buy your next home
In today’s environment of rapidly rising home values, home buyers can score a winning edge by having their ducks in a row before inspecting homes listed for sale.
This increasing need to be organised is one of the key reasons why 67% of Australians turn to a mortgage broker for expert support when they buy their home.
And according to research by Helia, prospective home buyers are getting support in the areas of:
– determining their borrowing power – 63% of those surveyed;
– help choosing the right loan – 60%;
– getting a home loan pre-approved – 56%; and
– applying for a loan – 55%.
So if you’d like help in any of these areas, or you want to get into the market before prices rise further, call us today to explore your home loan options.
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