In Australia, house prices have been on a steady upward trajectory in the face of ongoing interest rate rises.
The PropTrack dwelling values index recorded a 0.2 per cent increase in house prices in the same month. This followed a 0.1 per cent increase in January.
The February figure marks a reversal of the 0.1 per cent decrease recorded in December and suggests that the negative impacts of the interest rate rises may have been offset by other factors.
Chief among these are the low unemployment rate and strong economic growth, which has resulted in increased household wealth and increased demand for housing.
Despite the Reserve Bank of Australia (RBA) having implemented a total of 10 consecutive interest rate increases, which have roughly doubled mortgage rates and reduced borrowing capacity by around 30 per cent, the rebound remains extraordinary as it has occurred despite a 0.25 per cent hike in early February and another 0.25 per cent rise in early May.
According to PropTrack, new listings were down 11.1 per cent nationally in the year to February, with the three largest capital cities experiencing the biggest declines in stock. Despite the RBA’s aggressive rate rises, an acute lack of listings, soaring rents, and record immigration are proving to be more influential in driving the unexpected price rebound.
Given that net overseas migration is at record levels, it is anticipated that the market will become even tighter.
In 2022, Australia’s population experienced an unprecedented growth of 482,000, largely a result of net overseas migration which totaled almost 400,000, another record.
