“Hobart and Canberra have the furthest to go before staging a nominal recovery, with dwelling values remaining 12.4 per cent and 7 per cent below their cyclical highs from last year.”
According to the Bureau of Statistics, the value of residential property and land increased by $336 billion in the June quarter, the largest increase since the end of the COVID-era surge in house prices.
CoreLogic also found that national rents lifted another 0.7 per cent in September to be up by 8.4 per cent over the past year. Rents for houses in Melbourne have climbed by 11.3 per cent over the past year, while rents for units in Sydney have increased by 14.3 per cent.
Vacancy rates dipped to 1 per cent across all capitals, while in regional areas the vacancy rate edged down to a record low of 1.2 per cent. Before the pandemic, the long-term capital city vacancy rate was 3.1 per cent.
Lawless said while rents rose, the pace of increases was starting to slow, with the annual rate of growth appearing to have peaked.
“The slowdown in rental growth may seem counterintuitive at a time when vacancy rates are tightening. However, this is probably a signal that rental affordability constraints are forcing a structural change in household formation as group rental households reform and renters seek to maximise their tenancies in an effort to spread rental costs across a larger household,” he said.
The rise in property values and the continued increases in rents will add pressure to the Reserve Bank board, which will meet under Bullock for the first time on Tuesday.
Surging global oil prices have also added to inflation pressures while eating into the purchasing power of Australian motorists.
Commonwealth Bank chief economist Stephen Halmarick said while there was a risk Bullock and the RBA could lift official interest rates from their current rate of 4.1 per cent, it was more likely the bank would avoid inflicting more pain on the nation’s borrowers.
“Our view remains that the hurdle for another rate hike is high and that Australia is likely to see an extended period of no change in the 4.1 per cent cash rate,” he said.
“By the time we get to the November and December RBA board meetings, we expect to see a further weakening in domestic consumer spending and a slowdown in the pace of global economic growth, keeping the RBA on hold into 2024.”
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