Australian home values continue to climb with RBA expected to cut rates
Fresh data from Cotality shows Australian home values grew for the fifth month in a row, climbing 0.6 per cent in June and 1.4 per cent across the quarter. Over the past 12 months, national home values have climbed 3.4 per cent, taking the median value of a home to $836,586.
Economists see a rate cut at the next RBA meeting in early July as all but locked in, as the economy faces headwinds including conflict in the Middle East, US President Donald Trump's tariffs and slowing domestic growth, while inflation has become a background concern.
The May monthly inflation data released by the Australian Bureau of Statistics revealed lower-than-expected inflation, which CreditorWatch chief economist Ivan Colhoun said cleared the way for the RBA to reduce interest rates at its July meeting.
The Melbourne Institute's monthly inflation gauge, which reliably tracks the official inflation measure, also showed price pressures remain contained. Released on Monday, it showed core inflation lifted by 0.1 per cent in June, with the annual rate easing to 2.6 per cent. Headline inflation also rose by 0.1 per cent to be up by 2.3 per cent over the past 12 months.
Loading
However, further cuts in interest rates without sufficient growth in supply are likely to fuel further growth in housing values and house prices as borrowing costs fall and buyers flock into the market.
One year since the federal government began tracking its target of building 1.2 million new homes in Australia by the end of the decade, most analysts estimate Labor is on track to fall more than 250,000 homes short of its goal.
The Property Council of Australia called for all levels of government to redouble their efforts, including improving tax settings and planning systems, and for the federal government to commit to a framework of rolling five-year housing targets.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
30 minutes ago
- Sydney Morning Herald
With cyber-attacks on the rise, how safe is your super?
Superannuation shouldn't be set and forget. Our six-part series shows you how to regularly check in on your retirement. See all 9 stories. In 2023, Latitude Financial had 14 million customer records stolen from its system in a cyber-attack. In 2024, a hack on Medibank resulted in the personal details of 9.7 million customers being published on the dark web. In April, it was Australian Super who became the target of cyber criminals, with a combined $500,000 stolen from four of its members. Clearly, cyber-attacks on superannuation funds are on the rise – and there's a big reason why. 'Superannuation is a $4 trillion Australian business,' says Kam-Fung Cheung, a lecturer in cybersecurity at the University of New South Wales Business School. Superannuation represents an attractive pool of wealth to hackers. Which makes taking steps to protect it critically important – for both funds and individuals. 'For many Australians, their superannuation is going to be either the largest or second-largest asset they'll ever own,' says Jo Brennan, group executive, member engagement, education and advice at Aware Super. Loading 'It's really super-important to be very vigilant and to protect and be across your super.' So how can you protect your superannuation? Here's what the experts say. How your fund can keep your money safe Hackers typically gain access to super funds by purchasing passwords from data leaks via the dark web, then using those passwords to log into super accounts – a practice Cheung says is called 'credential stuffing'.
The Age
35 minutes ago
- The Age
With cyber-attacks on the rise, how safe is your super?
Superannuation shouldn't be set and forget. Our six-part series shows you how to regularly check in on your retirement. See all 9 stories. In 2023, Latitude Financial had 14 million customer records stolen from its system in a cyber-attack. In 2024, a hack on Medibank resulted in the personal details of 9.7 million customers being published on the dark web. In April, it was Australian Super who became the target of cyber criminals, with a combined $500,000 stolen from four of its members. Clearly, cyber-attacks on superannuation funds are on the rise – and there's a big reason why. 'Superannuation is a $4 trillion Australian business,' says Kam-Fung Cheung, a lecturer in cybersecurity at the University of New South Wales Business School. Superannuation represents an attractive pool of wealth to hackers. Which makes taking steps to protect it critically important – for both funds and individuals. 'For many Australians, their superannuation is going to be either the largest or second-largest asset they'll ever own,' says Jo Brennan, group executive, member engagement, education and advice at Aware Super. Loading 'It's really super-important to be very vigilant and to protect and be across your super.' So how can you protect your superannuation? Here's what the experts say. How your fund can keep your money safe Hackers typically gain access to super funds by purchasing passwords from data leaks via the dark web, then using those passwords to log into super accounts – a practice Cheung says is called 'credential stuffing'.
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
How far house prices have jumped above fair value
'It leads to the same conclusion as price-to-income ratios, which is that house prices have to come down a lot to bring them back to more affordable levels, or in this case, bring them back to fair value,' he says. Sydney houses are 41 per cent above fair value, the highest in the nation, although units are more reasonably priced, at 3 per cent above. Brisbane is the second-most overvalued city for a house, at 38 per cent. The future Olympic city ranks third nationally for unit overvaluation (19 per cent). Hobart offers the worst value in the country for units (27 per cent). Rental growth in Melbourne has been strong next to slowing house prices, resulting in a 15 per cent overvaluation. Only Perth is more equitable, at 10 per cent. Loading 'Melbourne is complicated for investors,' Oliver says. 'It's got high debt levels and then the government announced those property taxes, which encouraged investors to go elsewhere.' Oliver thinks two-thirds of Australians who own their property outright or have a mortgage would probably prefer prices to rise. 'From the point of view of social harmony, it is better to get property prices to a point of greater affordability. That doesn't mean you have to crash them,' Oliver says. 'That would probably cause a recession. The better outcome is where we go through a decade or so of house prices putting in very modest gains, or no gains at all, at least falling relative to people's wages.' Independent economic futurist Evan Lucas says many factors go into a real-life, fair value assessment. 'Fair value is also location, land size, condition, the age of home, prices of comparable properties, market conditions, interest rates and employment opportunities, and then the one more existential, emotional value,' he says. He says 55 per cent of Australians' wealth is in their home. 'The average growth of Australian housing is about 7 per cent per annum,' Lucas says. 'And then if you applied compounding to that over 30 years, you can explain why we got here today. 'If, as the data suggests, to get back to fair value Sydney would have to fall by 30 to 41 per cent, the impact that would have economically would be catastrophic. 'And I don't use that word lightly, because if your property value fell by a third, your household economics would completely upend themselves. You would stop spending and you would find yourself in mortgage jail.' Lucas says it is possible for young Australians to buy a home, but it will not resemble the property of their childhood. Also, the subjectivity of value changes over time, buyers' agent Steve Palise, founder of Palise Property, says. 'I advise clients how much they should spend based on their risk profile,' he says. 'How stable is their job, how much buffer they have for varying interest rates, and how much cash reserve they have for unexpected events.'
