Monday Market Recap – Realty.com.au Blog
By: Cameron Kusher
There was so much new relevant data out this week that I haven’t even included things that are slightly less relevant. So this week were looking at credit growth data, home values, the RBA’s monetary policy decision, building approvals, property listings, new apartment insights and quarterly rental data.
We also don’t even have the time to cover the US tariffs in detail but the good news for readers, particularly those with a mortgage, is that they will likely result in lower interest rates, the bad news is that will likely result in faster price rises for housing.
As always I love your feedback and comments and please share these insights far and wide.
RBA Financial Aggregates – February 2025
Key insights
- Total credit, excluding financial businesses was +0.5% higher in Feb 25, to be +6.5% higher over the year to Feb 25.
- Total housing credit was +0.4% over the month and +5.6% over the year and is now rising at its fastest annual pace since Feb 23.
- Total owner occupier housing credit reached $1.622 trillion in Feb 25 and was +0.4% over the month and +5.7% over the year. Total investor housing credit reached $768.2 billion in Feb 25 and it was +0.5% over the month and +5.6% over the year, its fastest annual growth since Nov 22.
What does it mean?
While demand for credit continues to increase, the rate of growth on an historic basis remains low. Nevertheless, the rate of housing credit growth is expanding which reflects both outstanding credit being paid back more slowly with higher interest rates and increasing demand for new credit. Credit growth will likely grow faster over the coming months with interest rate relief and improving consumer sentiment.
CoreLogic Home Value Index – March 2025
Key insights
- National dwelling values were +0.4% in the month of Mar 25 to be +0.7% over the first quarter of 2025 and +3.4% over the past year.
- Of all the capital cities and rest of state markets only Hobart saw a decline in values over the month, only Canberra saw a decline in values over the quarter while Melbourne (-2.6%), Hobart (-0.2%), Canberra (-0.5%) and Rest of Vic (-1.6%) saw declines over the past year.
- Capital city home values have risen at a slower pace over the month quarter and year (+0.4%, +0.5% and +2.8%) than values in regional areas (+0.5%, +1.4% and +5.3%).
- Rest of WA (+14.7%), Rest of SA (+12.6%), Perth (+11.9%) and Adelaide (+11%) have seen the strongest value growth over the past year.
What does it mean?
March was when we started to see the impact of the 25 basis point cut to interest rates in late Feb 25. As a result we saw an acceleration in home value growth over the month with broad-based value rises over the month and quarter. With no additional interest rate cuts in March or April I would expect we see further moderate value rises over the coming months. I am expecting further interest rate cuts throughout the year and once they occur that will likely lead to a moderate acceleration of value growth. The main challenge remains clearing the heightened volume of stock for sale which is giving buyers plenty of choice and less urgency to purchase.
RBA Monetary Policy Decision – April 2025
Key insights
- It was the first meeting of the new RBA Monetary Policy Board and at the meeting they decided to keep the official cash rate on hold at 4.1%.
- They noted that inflation continues to ease in line with their most recent forecasts but they are cautious about the outlook.
- The RBA board noted that there are risks leading to both higher and lower inflationary outcomes but they are resolute in returning inflation sustainably back to its target and will do what’s necessary to make that occur.
What does it mean?
There’s no further interest rate relief yet however, if the next quarterly inflation data is inline with or weaker than forecast I believe it is very likely that the RBA will reduce the cash rate by 25 basis points in May. Each 25 basis point change to the cash rate shifts borrowing capacities by about 2% to 2.5% so a second cut this year could increase borrowing capacity by up to 5%. Lower interest rates are likely to be positive for demand for housing and also assist with improving consumer sentiment.
ABS Building Approvals – February 2025
Key insights
- In Feb 25 there were 16,606 dwellings approved for construction which was -0.3% compared to the previous month but +25.7% compared to Feb 24 and the largest year-on-year increase since Aug 21.
- 9,321 new house and 7,284 new other dwellings were approved for construction in Feb 25 which was +0.2% and -0.9% compared to the previous month and +5.2% and +67.5% compared to the volume in Feb 24.
- Over the past year, the have been 178,578 new approvals which was +8.4% compared to Feb 24 and the the highest annual volume of approvals since May 23.
What does it mean?
Although dwelling approvals were marginally lower over the month they have increased from their recent lows and continue to trend higher. The annual number of dwelling approvals at 178,578 is still significantly lower than what is required to build 240,000 new dwellings a year as per the Housing Accord target. New housing continues to face challenges in its delivery due to heightened costs, heightened interest rates and heightened volumes of existing stock for sale which is in most instances much cheaper than new housing. These challenges are most prevalent in the apartment market.
SQM Research Property Listings – March 2025
Key insights
- There were 79,296 new property listings nationally in Mar 25 which was -1.6% over the month and -5.5% over the year. There were 256,000 total listings nationally were +0.9% over the month and -1.7% over the year.
- The capital cities with the largest annual increases in new listings were Darwin (+45.1%), Canberra (+4.1%) and Perth (+3.4%) and the largest falls were in Brisbane (-15.9%), Hobart (-7%) and Melbourne (-3.4%).
- The capital cities with the largest annual increases in total listings were Canberra (+11.4%), Sydney (+5.7%) and Hobart (+5.4%) and the largest declines were in Darwin (-28.6%), Brisbane (-9.8%) and Adelaide (-7.3%).
What does it mean?
New listings volumes were somewhat weaker in Mar 25 however, they have still risen compared to a few years ago. The total volume of stock available for sale remains elevated compared to recent years particularly in Sydney, Melbourne Hobart and Canberra while total listings remain at very low levels in Brisbane, Adelaide and Perth. The supply explains the divergence in price growth performance across these cities with more stock affording buyer more choice, less urgency and less impetus to over pay for a property and less choice in other cities doing the opposite. With April seeing Easter holidays leading into an election in early May I’d expect lower new listing volumes in the coming month and a potential further reduction in total listings.
Urbis Apartment Essentials National Snapshot – 2024 Q4
Key insights
- Over the 4th quarter of 2024, the average price per square metre for a new apartment in presales or under construction was $19,000/sqm which was +24% over the quarter and +34% over the year. Average rates per square metre were under $10,000 as recently as Q3 2021.
- In 2024, 55% of sales of presale and under construction apartments were to owner-occupiers which was steady from the previous year but prior to 2019 owner occupiers were less than 50% of purchasers. Melbourne and Sydney had the most owner-occupier purchasers and Gold Coast and Perth had the fewest.
- In Q4 2024, 39% of the available new stock in Brisbane sold, 16% on the Gold Coast, 11% in Sydney, 6% in Melbourne and 10% in Perth.
What does it mean?
While average rates per square metre are extremely high, it is being pushed higher by the type of new apartments being built. Prior to the pandemic much more stock was targeted at investors and first home whereas today developers are overwhelmingly targeting owner-occupiers or wealthy investors. Of course construction costs have also surged making more affordable apartment projects unviable in many areas. The repercussions of more owner-occupier apartments is higher prices and a smaller yield from sites meaning it is much harder to achieve new housing targets. Sadly there is little sign of things changing in the near term.
Domain Rental Report – March 2025 quarter
Key insights
- The combined capital cities had a median weekly rent in Mar 25 of $650 which was unchanged over the quarter and +3.2% over the year. The combined regional markets had a median weekly rent of $570 which was +1.8% over the quarter and +5.6% over the year.
- Annual growth in capital city house rents is now at a four year low while rental growth for units was the slowest for the March quarter in four years.
- Annual rental growth was strongest in Darwin (+7.7%), Perth (+6.2%) and Adelaide (+5.1%) and weakest in Melbourne (+1.8%), Canberra (+2.2%) and Sydney (+3.3%).
What does it mean?
As we’ve been seeing for much of the past year, the rate of rental growth is continuing to moderate which is good news for renters but it means landlords will have much less scope to lift rents than they have had. A greater availability of stock for rent and limited ability for renters to continue to pay higher rents are the key contributors to the slowing rental growth. I would expect the moderation in rental growth to continue over the coming months, with it being much more prevalent in the larger capital cities than in the regional markets where supply has not increased to the same magnitude and demand remains elevated.
CoreLogic Preliminary Auction Clearance Rates – week ending 6 April 2025
Key insights
- Preliminary auction clearance rates rose to 70.7% over the week compared to 66.1% the previous week with CoreLogic reporting that it was the first preliminary clearance rate above 70% since the week ending Feb 23.
- Auction volumes were lower over the week with 2,532 auctions down from 2,860 over the previous weeks.
- Throughout the major auction markets, only Brisbane recorded a fall in clearance rates over the week (58.3% vs 59.5%) with increases in Sydney (69.1% vs 65.5%), Melbourne (72.9% vs 67.2%), Adelaide (87.8% vs 75.6%) and Canberra (63.3% vs 50.9%).
What does it mean?
Given the recent weakness in clearance rates and given all of the US Tariff news last week it was a little surprising to see such a lift in clearance rates. The auction market remains fairly steady and I’d expect we’ll continue to see preliminary clearance rates in the 65% to 72% range over the coming weeks.
