Property market climbs towards new peak

Australia's housing market is on the rollercoaster ride, and it's showing no signs of slowing down!

Despite interest rates rising and the cost of living crunch, home values have shot up by a whopping 4.9% since March 2023. That's almost like a magic trick, making half of those dreary losses from the previous downturn disappear (remember that 9.1% dip from April 2022 to February 2023?).

And guess what? The total estimated value of Australia's housing market just hit a mind-boggling $10 trillion again – a milestone last seen back in June 2022.

So what’s driving home prices higher?

CoreLogic says three factors are pushing up property values:

– Net Overseas Migration: We've got more people landing on Aussie soil than leaving. That's a lot of extra house-hunters right there.

– Use of savings, profit and equity: upgraders are using savings, equity or profits from their home to buy their next place instead of borrowing more. This has seen demand for property stay strong even though rates have climbed higher.

– Tight supply: the volume of homes listed for sale is a lot lower than in previous years. That spells competition between buyers, which is putting pressure on prices.

Now, the million-dollar question: Will property prices keep rising?

Home values have been rising steadily over the past six months. What happens from here hinges on how interest rates move, and whether the economy stays in good shape.

As a guide, CoreLogic is expecting some heat to come out of the market recovery by the end of 2023.

Great news for homebuyers, but let's cross our fingers that this doesn't come from more rate hikes or a sluggish economy!

How to get ready to buy your next home

In this fast-paced market, being ready to snag your dream home is essential. Getting your ducks in a row before you hit those open houses is smart. That's why a whopping 67% of Aussies turn to mortgage brokers for expert guidance when they dive into the property market.

And according to research by Helia, prospective home buyers are getting support in the areas of:

– determining their borrowing power – 63% of those surveyed;
– help choosing the right loan – 60%;
– getting a home loan pre-approved – 56%; and
– applying for a loan – 55%.

For more information around home buying, or if you're wanting a mortgage broker on your side, please contact us.

General Advice Warning: This communication contains general information only and in no way constitutes the provision of professional advice, nor should it be relied on as a substitute for financial, credit, accounting, legal or other professional advice. We have not taken into account your financial situation, investment objectives or particular needs.  Before making an investment or financial decision, a person must seek appropriate independent professional advice and also consider whether this information is appropriate to their needs, objectives and circumstances.