Welcome to this month’s Property Market Update.
Once again the Reserve Bank of Australia (RBA) has decided to keep interest rates on hold for now.
However, financial analysts are watching economic developments closely as hints of an impending rate rise within the next year start to emerge.
Analysts focus on global economic indicators as well as our own economic factors in an effort to try and speculate what move the RBA might make next. While the RBA has been focused on trying to keep the value of the Australian dollar low with correspondingly low interest rates, it’s also important to ensure that rates aren’t so low as to risk a real estate bubble from forming.
The governor of the RBA, Philip Lowe, also noted that Aussie exports have increased and business investment within non-mining sectors has also increased in the past 12 months.
Meanwhile, statistics released by CoreLogic show that home prices across some Aussie capital cities increased strongly for the month of February. Dwelling values rose by 3.2% in Canberra and 2.6% in Sydney, while Melbourne saw an average increase of 1.5%.
If you take the statistics out further and consider the overall change in dwelling values in the past 12 months up to February 28, 2017, it’s clear that many capital cities are still showing strong growth. In the past 12 months, dwelling values in Adelaide increased by 7.8%, while Melbourne’s dwelling values have increased by 16.5%. The average increase across all of the combined capitals was 11.7%, the strongest growth since June 2010.
By comparison, cities that may have been affected by the mining downturn have seen values decline. In February, Perth dwelling values fell by 2.4% and Darwin’s property values fell by 4.3%.
CoreLogic also released figures showing that investor demand played an active role in the continued growth in property prices. Yet, many Australian banks and financial institutions have actively increased interest rates on investment loans in an effort to try and slow investor demand.
Several key members of our staff have put together some interesting articles for this month’s newsletter designed to help you achieve your financial goals. No matter what the real estate market’s doing or where interest rates end up, there are always positive options available to help you on your investing journey.
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