Dwelling values should continue to rise over the coming months, as the low interest rate environment encourages more buyers and investors into the market.
At its May board meeting, the Reserve Bank of Australia cut the cash rate for the second time this year, taking it to the new historical low of 2%pa. At the last three monthly meetings they have held this rate steady.
With the cost of borrowing now more affordable than ever, we should expect to see an increasing number of buyers entering the market.
Over the first four months of this year, combined capital city home values have increased by 3.8% with home values increasing across all cities except for Perth.
Sydney remains the standout market for capital growth so far this year followed by Melbourne with value growth over the past four months of 6.9% and 4.3% respectively.
While Sydney, and to a lesser degree Melbourne, have been the powerhouses for home value growth over recent years, most other capital cities have seen moderate levels of growth. As the cost of housing continues to rise across these cities you may start to see activity pick-up in other capital cities.
Source: Tim Lawless - Head of Research, CoreLogic RP Data