June quarter house price index
The latest Australian Bureau of Statistics (ABS) data confirms the moderate growth in house prices seen in Melbourne. Melbourne’s house price index increased by 2.4 per cent over the June quarter. REIV data for the same period also showed a 2.4 per cent increase in seasonally adjusted terms.
While there are differences between the two measures, it is clear that Melbourne’s housing market continues to recover. Compared to a year ago, conditions for both buyers and sellers are favourable in the lead up to the spring selling season.
Consumer sentiment, while fragile, has improved from last year. Auction clearance rates and volumes are higher than they were last year as more homes are being sold. The number of transactions overall has also increased indicating that there are now more buyers in the market than a year ago.
Financing costs have also reduced over the past year with four interest rate cuts, including the most recent cut this month. As a result, the cash rate is at a record low of 2.50 per cent from 3.50 per cent last year. This should attract more buyers into the market and provide further support for the recovery currently underway.
While the overall market is improving, it is important for buyers and vendors alike to consider local market conditions as well. Suburbs such as Kew, Ringwood, and Essendon have recorded above-average growth in the house price over the past quarter while others such as Narre Warren North, Northcote, and Footscray have not as yet.
Courtesy of REIV.com.au