Reserve Bank of Australia Maintains Cash Rate Amidst Housing Market Resilience
In a welcome development for homeowners, the Reserve Bank of Australia (RBA) has chosen to maintain the cash rate at 4.1 per cent this month. This decision comes as Australia’s housing market exhibits its resilience, marking the fourth consecutive month of recovery in June.
Continued Upward Trajectory in Property Prices
The property market has remained steadfast in its upward trajectory, as evidenced by the latest data from CoreLogic. National property values saw a commendable rise of 1.1 per cent in June, following a 1.2 per cent increase in May. This consistent growth has ignited optimism among investors and homeowners alike.
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Steady Interest Rates Amidst Economic Uncertainty
During its July meeting, the RBA underscored the significance of higher interest rates in striking a sustainable balance between supply and demand within the economy. RBA Governor Philip Lowe emphasized that the current interest rate level is conducive to this objective. In light of the ongoing economic uncertainty, the decision was made to maintain the current interest rates, affording time to assess the impact of recent rate hikes and the overall economic outlook.
Governor Lowe also hinted at the possibility of further monetary policy adjustments to manage inflation effectively.
Capital City Property Values Ascend, Sydney Takes the Lead
Amidst these developments, property values across the major cities experienced growth, with Sydney continuing to spearhead the resurgence. Sydney’s home values surged by an impressive 1.7% in June, bringing the cumulative recovery since January to 6.7%. Notably, the median housing values in Sydney are witnessing a noteworthy weekly increase of approximately $4,262.
The surge in prices can be attributed primarily to limited supply. The flow of new capital city listings in June was nearly 10% below the average of the past five years, contributing to a reduction of over a quarter in total inventory levels. Simultaneously, capital city sales estimates for the June quarter have surged to 2.1% above the preceding five-year average.
Regional Housing Values on the Rise
The positive momentum extends beyond the capital cities to regional areas, although at a more measured pace compared to their urban counterparts.
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