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According to a report by CoreLogic, the Australian property market appears to be making a comeback, with home values having increased for two consecutive months. The national Home Value Index by CoreLogic rose by 0.5% in April, following a 0.6% increase in March, indicating a recovery from a brief but intense decline.
CoreLogic’s research director, Tim Lawless, stated in the report that not only are housing values stabilizing or increasing in most areas of the country, but various other indicators are also affirming this positive trend.
Home values had been in negative territory for over a year, with a 9.1% decrease between May 2022 and February 2023, according to the report. In the report, Sydney ranked first for April.
According to the report, Sydney’s median home price increased by 1.3% compared to the previous month and by 3% in the previous quarter. However, despite this recent increase, the median home price in Sydney remains down 10.7% when compared to the previous year. The current median home price in Sydney is A$1.03 million (equivalent to US$680,000).
According to Mr. Lawless, two primary factors contribute to the resurgence of prices in the Australian property market: the comeback of overseas buyers and a shortage of supply, particularly in rental properties. The rise in net overseas migration, which is higher than anticipated, is one of the significant drivers of this positive trend, resulting in a surge in housing demand, while there are fewer rental properties available for people to rent. Mr. Lawless added that the low supply of available rental properties is occurring at a time when the demand for such properties is high, making it challenging for renters to find suitable housing.
The stabilization of interest rates has also played a role in the Australian property market’s recovery. The Bank of Australia is expected to maintain the current interest rate of 3.6% for May, according to Reuters. The bank’s decision is expected to be announced later this week. In April, the bank did not increase rates, marking the first time in a year that the rates were unchanged. The stability of interest rates could lead to an increase in consumer sentiment, which could further boost activity in the property market from both buyers and sellers.
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