• RAMS property update Spring 2017

    RAMS property update Spring 2017

    It’s now been over a year since the RBA dropped the official cash rate to a record low of 1.5% in August 2016. This stability has helped the Australian property market achieve 9.7% growth on average across our capital cities over the last 12 months1

    For most of this period, the Australian dollar hovered in the low to mid 70 cent range. But that changed in July, as a weaker US dollar helped the Aussie dollar climb to around 80 cents. 

    So what does a rising Aussie dollar mean for interest rates, and the property market in general? 

    As the RBA noted in its August statement, a rising Aussie dollar is “expected to result in a slower pick-up in economic activity and inflation than currently forecast”2 . This is partly because a stronger currency makes our exports more expensive and less competitive on a global stage.

    With this currency headwind putting pressure on the Australian economy, it’s looking increasingly unlikely the RBA will increase the pressure by lifting interest rates in the near future. That news should provide a timely boost to buyer confidence, paving the way for what could be an eventful Spring property market.  

    Median dwelling (house/unit) prices at 31 August 20171 

    City Median dwelling price (house and units) Capital growth last 12 months
    Sydney $909,914 13.0%
    Melbourne  $695,500 12.7%
    Brisbane $488,757 3.0%
    Adelaide $430,109 5.2%
    Perth $462,927 -2.8%
    Darwin $499,234 -4.2%
    Hobart $383,438 13.6%
    Canberra $575,173 8.0%
    Combined capitals $645,405 9.7%

    1 Corelogic Home Value index . Figure calculated on the combined capitals median house price increase. 

    2 RBA Statement, 1 August 2017

     

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.