Sydney leads housing market recovery, with prices rising for fourth consecutive month
After being hit hard by the worst of the real estate market downfall, Sydney is now leading it’s recovery. However uncertainty remains.
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Sydney is leading the way in the housing market recovery with yet another rise in home prices in April.
The Harbour City has recorded its fourth consecutive rise with home prices up another 0.4 per cent, according to PropTrack’s monthly Home Price Index.
The report revealed that Sydney’s rise was the second largest increase nationally and follows a
“Sydney led the recent downturn in prices, seeing a 7.2 per cent decline from peak to trough,” PropTrack’s senior economist Eleanor Creagh said.
“Now it’s leading the recovery, with prices up 1.68 per cent year-to-date.”
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“Positive demand drivers stemming from the shortages in rental supply and a rebound in international migration are playing a part.”
The report states that home prices are down 4.48 per cent compared to April 2022, while in regional NSW home prices were also up in April by 0.07 per cent.
Ms Creagh said inflation was higher and the labour market remained tight in April ahead of the Reserve Bank of Australia (RBA) board’s decision on interest rates tomorrow.
“[Last month] it opted to hold the cash rate steady at 3.60 per cent, giving the RBA room to pause and assess how economic conditions unfold,” she said.
“There is still a way to go in returning inflation to the target range, but with the impact of higher interest rates yet to fully impact household cash flows, and set to do so in months ahead, we’re likely to continue seeing inflation move lower.
“This gives the RBA leeway for a continued period of patience in May.”
Ms Creagh said the RBA could lift interest rates with the ongoing tightness in the labour market potentially add to wages pressure and fuelling further inflation.
“If inflation pressures end up being more persistent than expected and core inflation proves sticky, this would reaffirm that further tightening may be needed at some point,” she said.
“But for now, unless the disinflation trend reverses, the pause can be maintained, allowing more time to better assess unfolding economic conditions.
“There is already evidence that household spending is slowing, suggesting the economy will continue to slow..”
Ray White chief economist Nerida Conisbee said the stabilisation in house prices “wasn’t completely unexpected”.
“The drivers of price growth are still in place – there is a shortage of stock, population growth continues to accelerate and construction problems continue,” she said.
“But at the same time, we have had 10 interest rate rises and many people are coming to the end of their fixed loans. We are in recovery but it is likely to be stop/start for quite some time.
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Ms Conisbee said the stabilisation in April was good news for buyers.
“While the promised price crash never materialised, it is unlikely we will see a similar price boom like we saw during the pandemic,” she said.
“Prices are not running away in most of our capital cities.
“Sydney’s price growth has been the strongest since the start of the year.”
Originally published as Sydney leads housing market recovery, with prices rising for fourth consecutive month
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