3 Dec 2024 - Australian Secure Capital Fund - Market Update

Australian residential property prices continued to rise for the 21^st consecutive month with a 0.3% increase, but signs of easing continue with Darwin, Canberra, Melbourne and now Sydney all experiencing a decline in value according to CoreLogic's National Home Value Index, with losses of 1%, 0.3%, 0.2% and 0.1% respectively. Whilst this demonstrates that it is not all smooth sailing in the Australian property market, Brisbane, Hobart, Adelaide and especially Perth continued to perform strongly with further monthly increases of 0.7%, 0.8%, 1.1% and 1.4% respectively. Whilst the national capitals only saw a 0.2% increase for the month, the combined regionals are still performing strongly with a 0.6% monthly increase.

This new monthly data with more capitals and regions beginning to see a reduction or easing in prices, has impacted quarterly data now showing that Darwin, Canberra, Melbourne and Hobart have experienced losses for the quarter (1.3%, 0.9%, 0.8% and 0.1% respectively) whilst Sydney has now only seen 0.1% quarterly growth. Brisbane, Adelaide and Perth have however continued to see significant growth for the quarter, with 2.4%, 3.7% and 4.1% respectively.

As we head into the holiday season, and with the RBA remaining hesitant to reduce interest rates, it is expected to continue to see easing amongst the Sydney, Melbourne, Canberra, Hobart and Darwin markets, however the undersupply of property within Brisbane, Adelaide and Perth is likely going to see continued growth despite interest rate pressure.

Property Values as at 4th of Nov 2024

Median Dwelling Values as at 31st of October 2024

Quick Insights

Housing market on the cusp of another boom

Australia's housing market shows signs of potential growth as experts anticipate that rate cuts in 2025 could drive higher demand, especially in Sydney, Brisbane, Adelaide, and Perth. Melbourne's market remains relatively affordable, but with possible rate changes, investor interest may increase across major cities. Keep a close watch -- 2025 could open up new opportunities in the property market.

Source: Australian Financial Review

One year on - cash rate holds at 4.35%

The RBA has held the cash rate steady at 4.35% for another month, citing high underlying inflation as the reason for not yet reducing rates. Despite headline inflation falling within target, the RBA remains cautious, aiming to ensure inflation returns to the midpoint of the target range.

While borrowers might be eager for a rate cut, experts suggest patience, with potential rate reductions anticipated in early 2025.

Source: Broker Daily

Author: Filippo Sciacca, Director - Investor Relations, Asset Management and Compliance